Intra-industry trade

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Intra-Industry Trade between Japan and European Countries: a Closer Look at the Quality Gap in VIIT

Intra-Industry Trade between Japan and European Countries: a Closer Look at the Quality Gap in VIIT

In this paper, we provide an overview of the development of intra- industry trade (IIT) between Japan and various European countries, including both old and new EU members, as well as emerging Eastern European countries. The formation of stronger economic ties between European countries due to the creation and expansion of the EU contributed to an increase in intra-industry trade for European countries, even with respect to non-European countries. In contrast, according to factor proportion theory’s predictions regarding trade volume (Krugman, 1979; Lancaster, 1980), intra-industry trade increases with an increase in the similarity of two economies, resulting in more horizontal IIT (differentiated products of same quality). The price ratio of exports to imports in this horizontal IIT category is expected to be close to unity. This phenomenon should be more likely observed between older EU member countries and Japan. On the other hand, a country may export a product whose quality is different from its corresponding import, as in the North-South trade model of Flam and Helpman (1987) and Falvey and Kierzkowski (1987). In this case, we observe vertical IIT, with price ratios of export to import deviating from unity. We expect to find this vertical IIT in trade between Japan and less- developed European countries. In addition, emerging economies in Eastern Europe provide opportunities for foreign direct investments, resulting in increasing parts and components trade between subsidiary and parent firms, or intra-firm trade. This also suggests vertical IIT between emerging European countries and Japan.
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Determinants of the horizontal and vertical intra-industry trade between Norway and the European Union

Determinants of the horizontal and vertical intra-industry trade between Norway and the European Union

8 Falvey and Kierzkowski (1987) and Flam and Helpman (1987). Regarding Falvey and Kierzkowski (1987) model, the supply side is based on the comparative advantage theory, where product quality being linked to capital intensity in production. Thus, it is assumed that high- (low-) quality varieties are relatively capital (labour) intensive 10 . In turn, countries with relatively higher capital to labour ratios (capital-abundant) are considered to have comparative advantage in capital intensive products (higher quality set of varieties) and export them. On the other hand, countries that are labour-abundant will have comparative advantage in labour intensive products (low-quality varieties) and export them. On the demand side, although all consumers have the same preferences, each individual demands only one variety of the differentiated product, which is determined by their income (Crespo and Fontoura, 2004). This is still consistent with Linder (1961) hypothesis that “a significant element in explaining vertical product differentiation will be unequal incomes” (Falvey, Kierzkowski, 1987: 144). Furthermore, higher-income consumers acquire higher-quality varieties, while different income levels in each economy guarantee that there is a demand for every variety produced. Therefore, intra-industry trade arises because each variety of a differentiated good is produced in only one country, but is consumed in all countries. To sum up, taking two-country world model, IIT will be greater, the greater the differences of factor endowments between them (Faustino, Leitão, 2007). Especially, based on Helpman (1987), we can use income differences as a proxy for factor-endowment differences, because there is a positive correlation between the capital-labour ratio and per-capita income.
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TESTING INTRA-INDUSTRY TRADE BETWEEN PORTUGAL AND SPAIN 1990-1996

TESTING INTRA-INDUSTRY TRADE BETWEEN PORTUGAL AND SPAIN 1990-1996

In econometric terms we have tried to know which is the relation between the intra-industry trade index and the marginal intra-industry trade at the level of the main forty products, the results however were not unequivocal. The same is true as far as concerns the relation between the intra-industry trade index and the net export position at the level of the same products. Despite the fact that some attempts have been inconclusive, knowledge about Iberian trade has developed in a field essential to its upgrading, and the way is open for further research.
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Determinants of Intra-Industry Trade between Zimbabwe and its Trading Partners in the Southern African Development Community Region (1990-2006)

Determinants of Intra-Industry Trade between Zimbabwe and its Trading Partners in the Southern African Development Community Region (1990-2006)

Abstract: Problem statement: The main objective of this study was to establish the determinants of intra industry trade between Zimbabwe and its trading partners in the Southern African Development Community (SADC) region. The study was mainly motivated by the need to establish the type of goods that Zimbabwe trades with its trading partners. Approach: The study also wanted to prove the hypothesis that similarity in per capita income is not the main determinant of intra-industry trade between Zimbabwe its SADC trading partners; and also that intra industry trade does not necessarily take place among countries with similar economic structures and level of development. The study used the Modified Standard Gravity Equation which has Intra-Industry Trade Index as its dependant variable. The model was regressed using Ordinary Least Squares in excel. Results: The results of the study show that per capita income, trade intensity, distance, exchange rate and gross domestic product explain Intra-Industry Trade (IIT) between Zimbabwe and its SADC trading partners. The study also established that most countries in SADC trade in more or less the same goods and this can be explained by the type of development that these countries were subjected to during the colonial era which resulted in the establishment of similar economic structures and per capita incomes that were more or less the same. As result, these countries produce and trade similar products. Both hypotheses above were proved wrong. Conclusion: We therefore concluded that Zimbabwe needs to get into more bilateral trade agreements with its trading partners in order to enhance trade between itself and its trading partners. We also concluded that Zimbabwe has to give incentives to its producers and also mend its relationship with the Breton Woods Institutions (International Monetary Fund and the World Bank) if it wants to reach its full trade potential.
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The Portuguese intra-industry trade and the labor market adjustment costs: The SAH Again

The Portuguese intra-industry trade and the labor market adjustment costs: The SAH Again

This paper tests the SAH and also seeks to establish whether or not the MIIT effects are persistent in one-year and two-year lags. Furthermore, the paper estimates the global effect of trade variables on Portuguese employment growth, controlling the effects of other relevant variables such as productivity, wages, industrial concentration, scale economies, human capital and physical capital intensity. The findings of the paper are consistent with the SAH and confirm the results of other research that employed a similar labor adjustment cost indicator, if we do not consider the effects of the lagged MIIT (see, for example, Brulhart and Elliot, 1998; Brulhart, 2000). The paper analyzes the impact of trade and marginal intra-industry trade on Portuguese employment changes, using a dynamic panel data for the period 1996-2003. This took into account the bilateral trade between Portugal and its European Union partners and the employment turnover in 22 industries.
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Intra-Industry Trade and Revealed Comparative Advantage: An Inverted-U Relationship

Intra-Industry Trade and Revealed Comparative Advantage: An Inverted-U Relationship

The new theory of international trade changed the views about traditional theories of comparative advantage (Ricardian trade theory and Heckscher-Ohlin trade theory). Helpman and Krugman (1985) build up a model which generates both inter and horizontal intra-industry trade. The model incorporates factor endowments, decreasing costs and horizontal product differentiation. So, it is known as the Chamberlin-Heckscher-Ohlin model. Davis (1995) provides a Heckscher-Ohlin- Ricardo framework that gives a unified account of inter-industry and intra-industry trade and where decreasing costs are not necessary for intra-industry trade.
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Country-Specific Determinants of Intra-Industry Trade in Portugal

Country-Specific Determinants of Intra-Industry Trade in Portugal

ABSTRACT : Based on the theoretical models of Helpman and Krugman (1985), Falvey and Kierzkowski (1987) and Flam and Helpman (1987) and on the empirical studies of Greenaway, Hine and Milner (1994) and Hummels and Levinsohn (1995), we use a static and dynamic panel data approach to test the country-specific determinants of Portuguese intra-industry trade (IIT). We include income variables together with supply-side variables in order to test the demand similarity and factor endowments difference hypotheses. The results suggest that the Linder hypothesis is confirmed and that differences in income levels have a positive (negative) effect on vertical IIT (horizontal IIT and IIT). However, our findings only partially confirm Helpman and Krugman’s theoretical predictions.
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Intra-Industry Trade in Agricultural Products: The Case of China

Intra-Industry Trade in Agricultural Products: The Case of China

The results of the GL index show that the level of intra-industry trade between China and its trading partners is not high, also indicating that traditional factor endowment plays a significant role in the division of labour in the agricultural trade of China. The agricultural products with large volumes of trade experience low levels of intra-industry trade, while those with small volumes of trade enjoy high levels of intra-industry trade. In relation to the determinants of intra-industry trade, the empirical results indicate that difference in demand, geographical distance between China and its trading partners and economic size have negative correlations with IIT. The integration process between China and some country partners, namely Thailand and Philipines, weakens the negative effect of differences of per- capita GDP on IIT. On the other hand, the similiarity of cultures increases the IIT. In general, we can affirm that the econometric results support the hypotheses formulated. In a future research project, we will calculate both the vertical intra-industry trade (VIIT) and horizontal IIT (HIIT), in order to estimate the determinants of these two types of IIT.
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DETECTING VERTICAL INTRA-INDUSTRY TRADE IN CULTURAL PRODUCTS

DETECTING VERTICAL INTRA-INDUSTRY TRADE IN CULTURAL PRODUCTS

This significant incidence of intra-industry trade (IIT), originally identified within the European Economic Community by scholars such as Verdoorn (1960), Balassa (1966) and Grubel (1967), has then become the most distinctive feature of the European integration process. Since these seminal analyses, many works (see Grubel and Lloyd, 1975, among others) have deepened the comprehension of this phenomenon and provided insights of the related methodological issues. Recently, two amendments to the original conceptual and empirical framework have gained ground: a) the overcoming of the original opposition between specialisation and IIT; b) the need for detailed bilateral trade data, in order to properly assess the incidence of IIT, without incurring in biases due to the overlapping at the industry level or to geographical aggregation.
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Intra-industry trade and labor costs: The smooth adjustment hypothesis

Intra-industry trade and labor costs: The smooth adjustment hypothesis

correlation between MIIT and employment changes. However when we consider the lags of this variable the coefficients are always positive and the two-year lag has a bigger effect than a one-year effect. The data suggest that the intra-industry trade adjustment imposes reallocation labor costs in the same year (contemporaneous effect), but over a long term this effect change and the pressure for factor reallocation is decreasing. So the effects of intra-industry trade changes on labor market depend crucially of time period lags. In we add the coefficient of the contemporaneous variable (MIIT) with the coefficients of the lagged variables (MIIT t-1 and MIIT t-2) the SAH hypothesis is confirmed in the equations (2), but not in equation (1) and (3), although in equation (1) we only considered one-year lag. The results suggest us that if we consider further time- lags and/or other dependent variable the results may be quite different . The shortcoming of these econometric attempts arises from a lack of a formal model that relates adjustment labor costs and its trade and non trade determinants.
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Determinants of Vertical Intra-Industry Trade in the Automobile Manufacturing Sector: globalization and fragmentation

Determinants of Vertical Intra-Industry Trade in the Automobile Manufacturing Sector: globalization and fragmentation

from the perspective of a small, medium-income country, i.e., Portugal. It is of interest to discover whether the effect of an income gap on the components trade is positive, as found in Kimura et al. (2007). In addition, departing from the use of uni-directional trade flows, as found in the existing literature, we use a vertical intra-industry trade index for automobile components as a dependent variable. Our paper, focusing on the automobile sector in the EU, and taking into account othe bilateral partners such as the USA, Brazil, China and India, is also a complimentary study to Yoshida (2005), which examines the automobile components trade in Asia.
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Determinants of the pattern of horizontal and vertical intra-industry trade: what can we learn from Portuguese data?

Determinants of the pattern of horizontal and vertical intra-industry trade: what can we learn from Portuguese data?

In the nineties, the previous research received a significant stimulus with the method proposed by Abd-El-Rahman (1986) to empirically disentangle horizontal IIT (HIIT)- connected to the differentiation in characteristics- from vertical IIT (VIIT) - associated to differentiation in quality. In fact, surprisingly, because it contradicted the common view, empirical measurements displayed that VIIT appears to be more relevant than HIIT in all case studies. The consequence was that theoretical models on VIIT got an unexpected interest and researchers were led to test whether this type of trade would be determined by the factor proportions explanation of the comparative advantage instead of the commonly referred factors of the imperfect competitive context predicted by the monopolistic competition theory.
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O comércio intra-sectorial no sector agro-alimentar em Portugal: o cluster de produtos competitivos Intra-industry trade in Portuguese agro-industry: the competitive cluster

O comércio intra-sectorial no sector agro-alimentar em Portugal: o cluster de produtos competitivos Intra-industry trade in Portuguese agro-industry: the competitive cluster

RESUMO. Com base nos dados de comércio para os 27 países da União Europeia e para os 10 principais parceiros comerciais no resto do mundo, este trabalho analisa a evolução do comércio intra-sectorial total e por tipos (comércio intra-sectorial horizontal e vertical) na indústria agro-alimentar (IAA) Portuguesa para o período 2000-2008. Utilizando uma desagregação a 5 dígitos da CAE, o estudo analisa os 20 principais do comércio bilateral (produtos em que o comércio- exportações mais importações- é mais elevado) sendo os índices ao nível da indústria calculados como média ponderada dos índices ao nível do produto. A análise para a IAA permite-nos concluir que este sector acompanha a evolução do nosso país como país desenvolvido em termos do padrão de comércio dos produtos industriais. Ao longo do período em análise houve um aumento do conteúdo intra-sectorial no comércio dos produtos da IAA e o comércio intra-sectorial é predominantemente do tipo vertical. Os resultados evidenciam, também, que os nossos principais parceiros comerciais em termos de comércio intra-sectorial na IAA são a Espanha (com grande destaque), a Itália, a França e a Bélgica e a Alemanha, coincidindo, em termos gerais, com aqueles que são os nossos principais parceiros comerciais. Na análise para os países extra- Comunitários destaca-se o Canadá. Na análise microeconómica destacam-se a produção de vinhos comuns e licorosos, os produtos cárneos, os lacticínios, mas, também, a produção de azeite, a fabricação de sumos de frutos e de produtos hortícolas e a congelação de produtos de pesca e da aquacultura, principalmente no comércio com a Espanha. Novamente, a Espanha e a Itália são os mercados mais importantes para os produtos referidos. Palavras chave: comércio intra-sectorial; comércio intra-sectorial horizontal; comércio intra-sectorial vertical; diferenciação do produto; indústria agro-alimentar; Portugal; União Europeia.
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PORTUGAL AND SPAIN ENTERING THE COMMON MARKET()

PORTUGAL AND SPAIN ENTERING THE COMMON MARKET()

Therefore, there is a strong presumption that both Portugal and Spain face a considerable potencial for in- creasing intra-industry trade relative to inter-industry tr[r]

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Using the Gravity Equation to Explain the Portuguese Immigration-trade Link

Using the Gravity Equation to Explain the Portuguese Immigration-trade Link

With globalization, many nations have liberalized their trade policies and removed trade barriers. The transaction costs have decreased and immigration has contributed to increase international trade: inter-industry trade and intra-industry trade (IIT). According to the traditional trade theory (Ricardian and Heckscher-Ohlin models), the factor movements and trade are substitutes. According to the new trade theory, the link between migration and IIT can be established through the trade transaction costs (see, for example, Helpman and Krugman, 1985). However, the theoretical literature on the effects of immigration on trade is scarce. In his seminal paper, Rauch (1999) proposes a network view of trade in differentiated products where immigration can lead to a reduction in trade transaction costs. He uses a gravity model of international trade to test if proximity and common language/colonial ties are more important to differentiated products than for homogeneous products. There are some empirical studies on the relation between immigration and trade (see Girma and Yu, 2002; Blanes, 2005; White, 2007).
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Immigration and Trade in Portugal: A Static and Dynamic Panel Data Analysis

Immigration and Trade in Portugal: A Static and Dynamic Panel Data Analysis

goods. The positive effect on exports and imports confirm this hypothesis. In the static model, we concluded that immigration strengthens exports more than imports. In the dynamic model, the effect of immigration on exports remains positive, but the effect is weaker. Fifth, our empirical results contradict the theoretical hypothesis on the relationship between exports and immigration and this may contribute to the theoretical research. Sixth, some of the control variables, such as relative factor endowments and distance, are found to be statistically significant and the results are more robust with the introduction of these country-specific characteristics variables. Seventh, the paper introduces cultural ties (common culture) and neighborhood as proxies for trade transaction costs. The introduction of these control variables also improved the specification model. The results suggest that when immigrants to Portugal come from a Latin partner-country, the effects on trade are greater than they are in relation to those from other countries. Finally, our findings suggest that Portuguese export industries need not be afraid of a liberal immigration policy: both host and source countries can gain. Free trade and freedom of labour migration are not a zero sum game. What is of most relevance for immigration policy is the immigrants’ skills. Hence, in future research, we must include the different levels of immigrants’ skills as explanatory variables and analyses its impact on exports, imports and intra-industry trade by types. The consideration of age at entry, time in the home country, education, trans-migrant entrepreneurs and other information from micro data will also improve the empirical model specification and may explain the positive effect on exports. The analysis also may be extended to all European Union countries ( EU27) in addition to the inclusion of immigrants arriving from less developed countries.However, despite the empirical results, the economic theory has much to say about the positive relationship between exports and immigration.
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The intra-industry effects of going concern withdrawn audit reports

The intra-industry effects of going concern withdrawn audit reports

Kausar et al. (2013) find that the socioeconomic, religious and racial/ethnic characteristics of GCO investors are very similar to those of retail investors who are more attracted towards speculative, and lottery-type stocks. This study also finds that the net buying behavior of GCO investors is also significantly related to local socioeconomic characteristics. Inicially, the authors show that GCO firm stocks are particularly attractive to retail investors who trade for speculative reasons. In fact, these stocks have lottery-type characteristics, representing cheap bets with negative expected return with a small probability of a high payoff around the GCO event date, and these characteristics become even more pronounced over the following 12-months. In contrast to the sophisticated investors, retail investors searching for cheap bets are likely to behave in an opposite way and buy such speculative stocks. Therefore, the established going-concern anomaly may be largely driven by retail investor prone to “gambling in the market” by increasing their holdings in the GCO firms, and the volume of their trades.
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Ukraine's Membership in the World Trade Organization

Ukraine's Membership in the World Trade Organization

ABSTRACT. The WTO is a multilateral organization that seeks to ensure that international trade relations are governed by the rule of law and not by the rule of power. It comprises a network of contrac- tual rules and commitments capable of being monitored and enforced multilaterally. Ukraine’s accession to the WTO has been marked by notable achievements in the areas of legislation and bilateral agree- ments with member-states regarding market access. Outstanding is- sues in Ukraine’s accession include agriculture, industry policy, trade-related investment measures (TRIMs), technical barriers to trade (TBT), sanitary and phyto-sanitary (SPS) measures, and intel- lectual property rights. While completion of the process relies on Ukraine’s efforts alone, progress is being made and is expected to reach a successful conclusion.
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Intra-articular Nodular Fasciitis: An Unexpected Diagnosis for a Joint Lesion: A Case Report

Intra-articular Nodular Fasciitis: An Unexpected Diagnosis for a Joint Lesion: A Case Report

Pathological lesions in and around a joint can arise from underlying dermis, subcutis, deep muscle, bone or synovium. Clinical presentation can include joint pain, joint swelling, palpable masses and mechanical restriction. Whilst giant cell tumour of tendon sheath, pigmented villonodular synovitis, synovial chondromatosis, lipoma arborescens, juxta articular myxomas and inlammatory arthritis are the better-known conditions of the joint. Intra-articular nodular fasciitis, on the other hand, is less well recognized both clinically and radiologically. It is rarely seen in routine practice and is only described in case reports in the literature. Due to the non-speciic clinical and radiological indings as well as the unfamiliarity with the entity, the diagnosis of intra-articular nodular fasciitis is usually clinched only after histological examination. We present a case of intra-articular nodular fasciitis arising in the knee joint which was not suspected clinically or radiologically.
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Creating competitive poles – the sustainable model for obtaining the competitive advantage

Creating competitive poles – the sustainable model for obtaining the competitive advantage

competitive pole unifies businesses of all sizes, research laboratories and training institutions with the purpose to develop synergies and cooperation in a given area. It can associate other partners such as national and local authorities, and business services companies. The challenge is to build on synergies and innovative collaborative projects and allowing businesses engaged in these partnerships take a position at the forefront of their fields, both nationally and internationally. We consider therefore that a competitive pole can have a complete structure of triple helix (authorities, industry research, and development) or four clover (triple helix + institution catalyst).
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