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The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Auriol , Emmanuelle / Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Zulehner, Christine / Schirle, Tammy


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The Geography of Intra-Industry Trade: empirics

Anthony J. Venables1 / Patricia G. Rice2 / Martin Stewart3

1London School of Economics,

2University of Southampton,

3London School of Economics,

Citation Information: Topics in Economic Analysis & Policy. Volume 3, Issue 1, ISSN (Online) 1538-0653, DOI: 10.2202/1538-0653.1105, September 2003

Publication History

Published Online:
2003-09-23

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.

Keywords: intra-industry trade; trade structure; geography; transport costs

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[1]
Marius Brülhart
World Economy, 2009, Volume 32, Number 3, Page 401

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