Abstract
As economic integration in East Asia progresses, trade patterns within region are displaying an ever – greater complexity. Though inter – industry trade still accounts for the majority, its share in overall trade is declining. Instead, intra – industry trade (IIT), which can be further divided into horizontal IIT (HIIT) and vertical IIT (VIIT) is growing in importance. In this paper, we set out and examine different kinds of intra- industry trade between Iran and G-8 member states by comparing the Greenway, Hine and Milner (1994) and Fontagne and Freudenberg (1997) approaches to disentangling vertical and horizontal intra – industry trade. Then we introduce and examine a new index from Azhar and Elliott to define product quality types between Iran and G-8 members for the time of 2001-2009. Result shows that a significant share of Iran’s industry trade with G-8 state members has been assigned to vertical intra – industry trade. With regarded to Azhar and Elliott index, the main share of intra- industry trade consists of low quality goods.
Highlights
For more than four decades theoretical and empirical researchers in the field of international trade have been keenly interested in two way trade of products belonging to the same industry, that is intra – industry trade (IIT), with theories of comparative advantage, or Heckscher –Ohlin factor endowment, focusing on inter - industry trade
In 2006, Iran's foreign trade with G-8 state members improved to some extent and the U.S intra-industry trade increased from 11.28% to 23.05
The share of Iran’s intra-industry trade with G-8 members has increased in that year over 2003, it has witnessed a decrease compared to its trade in 2006, which may be due to changes in the composition of major trading partners in favor of inter-industry trade
Summary
For more than four decades theoretical and empirical researchers in the field of international trade have been keenly interested in two way trade of products belonging to the same industry, that is intra – industry trade (IIT), with theories of comparative advantage, or Heckscher –Ohlin factor endowment, focusing on inter - industry trade. In recent years empirical studies (Bernard and Jensen, 2001; Bernard et al, 2005; Hallak and Schott, 2005) offer clear evidence of the increasing importance of intra-industry trade based on vertically differentiated products. A third stage is suggested by Azhar and Elliott This index (AE) has symmetrical limits, is scaled in both upper and lower bounds, and can measure the dispersion of product quality in IIT. This type of trade increases consumers’ options and increases the level of competition among producers of a given product in different countries. The data collected from Tehran’s Trade, Industry and Mine Chamber for different products at a four-digit level based on the Harmonized System will analyzed and used in the study
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
