Horizontal and Vertical Intra-Industry Trade: The Case of Asean Trade in Manufactures

Dene Hurley

International Economic Journal, 2003, vol. 17, issue 4, 1-14

Abstract: For over two decades prior to the Asian Currency crisis of 1997, the economies of the ASEAN-5 underwent an impressive economic expansion while increasing their openness to trade. This paper examines the role of intra-industry trade (IIT) in intra-ASEAN trade. Focusing on trade in manufactures, it breaks down IIT by vertically (VIIT) and horizontally (HIIT) differentiated goods, and identifies country-specific factors which drive them. By 1996, while 60% of the total intra-ASEAN trade constituted IIT, the share of IIT in trade in manufactures was even higher, dominated by VIIT which reflected differences in capital-labor intensity. Market size and foreign direct investment also influenced both VIIT and HIIT. [F14]

Date: 2003
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DOI: 10.1080/10168730300080023

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