Bilateral Intra-Industry Trade in a Multi-Country Helpman-Krugman Model

Robert Shelburne

International Economic Journal, 2002, vol. 16, issue 4, 53-73

Abstract: The factors that explain the level of intra-industry trade and its share of total trade in a multi-country version of the Helpman-Krugman model are derived. The role of similarity of endowment ratios and similarity of economic sizes differ in the multi-country version from the two country version of this model. It is also demonstrated that the volume of total trade, the volume of intra-industry trade and the volume of inter-industry trade can each be described by a modified gravity equation. A new diagrammatical device is introduced that illustrates the relationship between trade volume and similarity in country size. [F12]

Date: 2002
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DOI: 10.1080/10168730200000028

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