Document Type : Research Paper
Authors
1 Lecturer at Allameh Tabatabai University
2 PhD student at Allameh Tabatabai University
Abstract
The purpose of this paper is to identify and analyze country-level determinants of Intra-industry Trade (IIT) in 13 selected developing countries from 1994 to 1998. To accomplish this, both bilateral and total trade flows calculated were for all the 13 countries. The determinants of IIT have been estimated using both pooled and cross-sectional data. The results support the hypothesis that the economic growth is a factor determining the IIT. They also suggest that market size, membership in regional economic organization and similarity in per capita incomes are other country-specific determinants of IIT. In addition, it seems that a common language has the positive effect on bilateral IIT. On the other hand, the results suggest that trade barriers limit IIT and R&D expenditures reinforce inter industry trade, and that there is a significant negative correlation between the extent IIT and trade imbalance. However, the paper does not provide definite results concerning the effect of both distance and multinational enterprises (MNEs) on IIT. In short, the results of the present paper indicate the significance of country-specific factors in determining IIT. Whereas IIT theories basically concentrate on industry-specific factors.
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