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Vertical and Horizontal Intra-Industry Trade: A Cross Industry Analysis for the United Kingdom

Vertical and Horizontal Intra-Industry Trade: A Cross Industry Analysis for the United Kingdom Abstract A large theoretical literature has emerged directed at explaining the presence of intra-industry trade (IIT). One of the distinctions which comes out of these models is that between horizontal IIT (where goods are differentiated by attributes) and vertical IIT (where goods are differentiated by quality). In this paper horizontal and vertical IIT in UK trade are disentangled using a unit value dispersion criterion and a range of industry characteristics. The paper not only points up the relative importance of vertical and horizontal IIT in the United Kingdom, it also demonstrates how a failure to separate them out can impact on the interpretation of empirical results. This content is only available as a PDF. Author notes The work on which this paper is based is from a projection 'Trade, Specialisation and Adjustment in the Single Market', funded under the EC Stimulation Plan for the Economic Science. The authors gratefully acknowledge financial support from the EC as well as research assistance from Robert Elliott. Helpful comments on an earlier draft were received from participants at a SPES Workshop in Athens, and seminars at the University of Adelaide and Curtin University. Finally, two anonymous referees and the Managing Editor provided many constructive suggestions which led to substantial revisions. The authors alone are responsible for the final product. © Royal Economic Society 1995 http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economic Journal Oxford University Press

Vertical and Horizontal Intra-Industry Trade: A Cross Industry Analysis for the United Kingdom

Economic Journal , Volume 105 (433) – Nov 1, 1995

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References (19)

Publisher
Oxford University Press
Copyright
© Royal Economic Society 1995
ISSN
0013-0133
eISSN
1468-0297
DOI
10.2307/2235113
Publisher site
See Article on Publisher Site

Abstract

Abstract A large theoretical literature has emerged directed at explaining the presence of intra-industry trade (IIT). One of the distinctions which comes out of these models is that between horizontal IIT (where goods are differentiated by attributes) and vertical IIT (where goods are differentiated by quality). In this paper horizontal and vertical IIT in UK trade are disentangled using a unit value dispersion criterion and a range of industry characteristics. The paper not only points up the relative importance of vertical and horizontal IIT in the United Kingdom, it also demonstrates how a failure to separate them out can impact on the interpretation of empirical results. This content is only available as a PDF. Author notes The work on which this paper is based is from a projection 'Trade, Specialisation and Adjustment in the Single Market', funded under the EC Stimulation Plan for the Economic Science. The authors gratefully acknowledge financial support from the EC as well as research assistance from Robert Elliott. Helpful comments on an earlier draft were received from participants at a SPES Workshop in Athens, and seminars at the University of Adelaide and Curtin University. Finally, two anonymous referees and the Managing Editor provided many constructive suggestions which led to substantial revisions. The authors alone are responsible for the final product. © Royal Economic Society 1995

Journal

Economic JournalOxford University Press

Published: Nov 1, 1995

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