Intra-Industry Trade and Revealed Comparative Advantage: An Inverted-URelationship

• Author(s): Faustino, Horácio C.
• Date: 2008
• Persistent ID: http://hdl.handle.net/10400.5/2328
• Origin: Repositório da UTL
• Subject(s): intra-industry trade; horizontal intra-industry trade; vertical intra-industry trade; comparative advantage
• Document Type: Other
• Language: English

Description

This paper investigates the relationship between all types of intra-industry trade (IIT) and comparative advantage. The paper finds strong evidence of an inverted-U relationship.The results also suggest that relative autarky costs is a common determinant for any type of IIT, which contradicts the prediction made by theory for separating the determinants of horizontal and vertical IIT.