TY - UNPB

T1 - Intra-industry trade

T2 - a Krugman-Ricardo model and data

AU - Soo, Kwok Tong

PY - 2013/6

Y1 - 2013/6

N2 - This paper develops a many-good, many-country model of international trade which combines Ricardian comparative advantage and increasing returns to scale. It is shown how the gains from trade depend on relative country sizes, trade cost, and the technological similarity between countries. Trade consists of both inter- and intra-industry trade. The trade-weighted Grubel-Lloyd index of intra-industry trade is positively related to own country size and the number of exported sectors, and is negatively related to average partner country size, the number of imported sectors, and the trade cost. The empirical evidence supports most of these predictions, and the model fits the data better for OECD than for non-OECD countries.

AB - This paper develops a many-good, many-country model of international trade which combines Ricardian comparative advantage and increasing returns to scale. It is shown how the gains from trade depend on relative country sizes, trade cost, and the technological similarity between countries. Trade consists of both inter- and intra-industry trade. The trade-weighted Grubel-Lloyd index of intra-industry trade is positively related to own country size and the number of exported sectors, and is negatively related to average partner country size, the number of imported sectors, and the trade cost. The empirical evidence supports most of these predictions, and the model fits the data better for OECD than for non-OECD countries.

KW - Increasing returns to scale

KW - Comparative advantage

KW - Intra-industry trade

M3 - Working paper

T3 - Economics Working Paper Series

BT - Intra-industry trade

PB - Lancaster University, Department of Economics

CY - Lancaster

ER -