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The geography of intra-industry trade: empirics

Venables, Anthony, Rice, Patricia and Stewart, Martin (2003) The geography of intra-industry trade: empirics. Topics in Economic Analysis and Policy, 3 (1). p. 1105. ISSN 1538-0653

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Abstract

This paper uses bilateral trade data for OECD countries at the 3-digit industry level to investigate the geography of intra-industry trade (IIT). IIT diminishes with distance and much of the existing empirical literature suggests that this is an inherent characteristic of such trade, arguing that trade in sectors intensive in IIT is choked off rapidly by distance. We show that the dependence of IIT on geography arises not because of any inherent feature of the effects of distance on such trade, but because of the spatial structure of countries' supply and demand characteristics; close countries do a lot of IIT because they have similar economic structures.

Item Type: Article
Official URL: http://www.bepress.com/bejeap/topics/
Additional Information: © 2003 Berkely Electronic Press
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L10 - General
L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L14 - Transactional Relationships; Contracts and Reputation; Networks
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Departments > Economics
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 18 Dec 2007
URL: http://eprints.lse.ac.uk/138/

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