HORIZONTAL AND VERTICAL INTRA-INDUSTRY TRADE IN THE U.S. FOOD PROCESSING INDUSTRY

Changyou Sun and Won W. Koo

No 23629, Agribusiness & Applied Economics Report from North Dakota State University, Department of Agribusiness and Applied Economics

Abstract: Intra-industry trade (IIT) in the U.S. food processing industry is evaluated in this study. The IIT index is disentangled into horizontal and vertical components and evaluated at 6-digit HTS product levels. The degree of IIT varies across different trading partners and sub-industries, and, for the U.S. food processing industry as a whole, it has been steadily increasing since 1989. Most of the IIT in the U.S. food processing industry is vertical in nature. However, horizontal IIT has been increasing faster than vertical IIT. The determinants of horizontal and vertical IIT are examined in a multiple-industry and multiple-country model. Industry characteristics show more significant effects on IIT than country characteristics. Product differentiation, market structure, and scale economies are all relevant in explaining the variation of IIT.

Keywords: Industrial Organization; International Relations/Trade (search for similar items in EconPapers)
Pages: 20
Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:ags:nddaae:23629

DOI: 10.22004/ag.econ.23629

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