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Driving forces of vertical intra-industry trade in Europe 1996–2005

[journal article]

Jensen, Lars; Lüthje, Teit

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Abstract A common feature in the empirical literature of intra-industry trade is the analysis of trade between a given reference country and a set of partners. This article differs from previous studies by examining the bilateral trade among all trading partners within a set of partners. Using a panel data approach, we find that differences in factor endowments seem not to be important as a driving force behind vertical intra-industry trade for European countries over the chosen period. More important driving forces are production size, geographical proximity, average income per capita and income distribution overlap.
Classification Political Economy
Free Keywords Vertical intra-industry trade; European trade; Panel data; F10; F14; F15
Document language English
Publication Year 2009
Page/Pages p. 469-488
Journal Review of World Economics, 145 (2009) 3
Status Postprint; peer reviewed
Licence PEER Licence Agreement (applicable only to documents from PEER project)