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Economic Geography, Comparative Advantage and Trade within Industries: Evidence from the OECD

Sir David Greenaway () and Johan Torstensson
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Johan Torstensson: Lund University and FIEF, Postal: FIEF, Wallingatan 38, SE-111 24 Stockholm, Sweden

No 144, Working Paper Series from Trade Union Institute for Economic Research

Abstract: A large share of world trade, especially among the OECD countries, is two-way trade within industries, so called intra-industry trade. Despite this, few attempts have been made to examine why countries export some products within industries, whereas they import others. We examine this issue, by means of regression analysis, by examining the shares of IIT that are vertical and horizontal and by examining price dispersion. The regression results suggest that an abundant human capital endowment as well as a large domestic market increases the quality of OECD-countries´ manufacturing exports, thus offering support for comparative advantage models as well as newer geography models. But, human capital becomes an increasingly important determinant of quality over time.

Keywords: comparative advantage; economic geography; intra-industry trade; vertical differentiation (search for similar items in EconPapers)
JEL-codes: F12 F13 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-tid
Date: 1997-07-22
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http://swopec.hhs.se/fiefwp/papers/WP144.pdf (application/pdf)

Related works:
Journal Article: Economic Geography, Comparative Advantage and Trade within Industries: Evidence from the OECD (2000)
Working Paper: Economic Geography, Comparative Advantage and Trade Within Industries: Evidence from the OECD (1998) Downloads
Working Paper: Economic Geography, Comparative Advantage and Trade Within Industries: Evidence from the OECD
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