How Does Industrialization Affect the Structure of International Trade? the Japanese Experience in the Pacific Basin, 1975-85

Sayuri Shirai

No 1994/095, IMF Working Papers from International Monetary Fund

Abstract: This paper provides a theoretical model to address the issue of how industrialization affects the structure of international trade. Considering both horizontal and vertical product differentiation, the model shows that intra-industry trade increases when product quality improvement emerges in a developing country and when a difference in relative factor endowments between a developed and a developing countries shrinks. To promote understanding of the conclusions of the model, the paper also uses actual trade data between Japan and Indonesia and between Japan and Korea.

Keywords: WP; industry trade; developing country; intra-industry trade; manufactures aggregate; industry index; trade volume; IIT index; Manufacturing; Agricultural commodities; Industrialization; Exports; Imports; East Asia (search for similar items in EconPapers)
Pages: 40
Date: 1994-08-01
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