Intra-Industry Trade and the C-H-O Model: Evidence and Implications for Adjustments

David Greenaway and Chris Milner

Chapter 10 in Frontiers of Research in Intra-Industry Trade, 2002, pp 180-196 from Palgrave Macmillan

Abstract: Abstract By the late 1980s many of the basic issues relating to modelling the determinants of intra-industry trade appeared to be resolved. There was a core theoretical foundation which offered a widely accepted explanation for intra-industry specialization and two-way trade in horizontally differentiated goods. In its single-sector form (Krugman, 1979) it offered a pure non-H—O explanation of such specialization and exchange between identical economies, based upon individuals’ preference for variety and the existence of decreasing costs in production. The subsequent incorporation of both H—O and non-H—O sources of trade into a general equilibrium framework (Helpman, 1981; Helpman and Krugman, 1985) allowed for inter-industry specialization in homogenous goods and intra-industry specialisation in horizontally differentiated goods, and is often referred to as the Chamberlin—Heckscher—Ohlin (C—H—O) model. Thus a theoretical coherence was provided for the contrast between ‘new’ and ‘old’ (factor endowment) explanations of trade. Interest was also generated in the opportunities created by this ‘new’ type of model for affecting the pattern of comparative advantage through the strategic use of trade and industrial policies.

Keywords: Capita Income; Factor Composition; Factor Endowment; General Equilibrium Framework; Monopolistic Competition (search for similar items in EconPapers)
Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-28598-9_10

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230285989

DOI: 10.1057/9780230285989_10

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().