ASYMMETRIC PATTERN OF INTRA-INDUSTRY TRADE BETWEEN THE UNITED STATES AND CANADA

MinKyoung Kim, Guedae Cho and Won W. Koo

No 23625, Agribusiness & Applied Economics Report from North Dakota State University, Department of Agribusiness and Applied Economics

Abstract: This study proposes alternative rationales to explain an asymmetric intra-industry trade pattern between the United States and Canada after the free trade agreement became effective. Using time-series data, a gravity equation is developed which enables us to examine the impacts of relative market size, exchange rates, and transportation costs on bilateral trade. It is found that these three effects have to be taken together in order to explain the asymmetric intra-industry trade pattern. Exchange rate impacts on bilateral trade are found to the most significant, indicating that U.S. dollar appreciation causes a more asymmetric trade pattern for agricultural goods than for large-scale manufacturing goods.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 16
Date: 2003
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:nddaae:23625

DOI: 10.22004/ag.econ.23625

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