Intra-industry Trade of Transition Countries: Trends and Determinants

Yener Kandogan ()

William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: This paper analyzes trends in different components of trade of transition countries. To explain the cross-country differences, the paper points out the important distinction between the determinants of inter-industry trade and intra-industry trade (IIT), and horizontal and vertical IIT. Using varieties of gravity models, it is shown that variables from Increasing Returns Trade Theory, such as scale economies, similarity of income levels, and number of varieties produced play important roles in IIT, especially in horizontal IIT, whereas factors such as comparative advantage, dissimilarity in income levels, and having more developed trade partners of Heckscher-Ohlin Trade Theory are crucial in determining inter-industry trade and vertical IIT to a lesser degree.

Keywords: Vertical and horizontal intra-industry trade; transition countries; gravity models (search for similar items in EconPapers)
JEL-codes: F14 P2 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2003-06-26
New Economics Papers: this item is included in nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

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