Abstract
A model of international trade under conditions of spatial price discrimination is developed in order to demonstrate that intra-industry trade is identical commodities can occur between two countries over a wide range of market structures. The geographic extent of intra-industry trade is shown to be inversely related to the degree of competition affecting imports in each country in the sale of the homogeneous commodity. Furthermore, the degree of intra-industry trade is directly related to the incidence of spatial price discrimination in favor of distant customers.
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