Horizontal Intra-industry Trade Research Articles

EU, 미국, 중국시장에서 한국 신재생에너지 산업의 품목별 수출 품질경쟁력과 시장점유율 변화 요인 분석

This study applied product and market segment analysis (PMSA) and intra-industry trade (IIT) indices to capture the quality and price competitiveness and high- and low-quality IIT of new renewable energy (NRE) items in Korea’s trade with major economic powers (i.e., European Union [EU], United States, and China) for the period 2012-2022. Additionally, this study used the constant market share (CMS) technique to divide the causes of fluctuations in Korea's market share in large economies’ import markets into demand side, supply side, and adaptation side. The empirical results can be summarized in the following three points. First, PMSA of quality and price competitiveness confirmed Korea’s weakness in securing price and quality competitiveness in trade with the EU and the United States and Korea’s inability to secure price competitiveness in trade with China. Additionally, analysis of high- and low quality IIT showed that in trade with the EU, low-quality vertical IIT and horizontal IIT were mixed, whereas in trade with the United States and China, the majority of items showed low-quality vertical IIT and high-quality vertical IIT patterns, respectively. More importantly, the CMS results by item in the NRE industry based on the 2017/2022 period showed that in the EU and US import markets, supply factors caused most of the market share changes for the majority of items, and in the Chinese import market, the main causes were a mixture of supply and demand factors. In conclusion, policy and institutional support for research and development of independent and convergence technologies are needed to strengthen the NRE industry’s quality competitiveness, and market expansion of the NRE industry can be accomplished by expanding direct investment in the United States and the EU, as well as through government financial support.

INTRA-INDUSTRY TRADE IN AGRI-FOOD PRODUCTS BETWEEN POLAND AND EUROPEAN UNION COUNTRIES

The aim of this article is to elucidate intra-industry trade in agri-food products between Poland and other EU countries. This approach focuses on the analysis of Poland’s intra-industry trade with the integrative group and selected EU countries, distinguishing between horizontal and vertical intra-industry trade. It also identifies the countries with which Poland exports higher-quality product groups than it imports, and those to which it exports lower-quality agri-food products compared to the ones it imports. The Grubel-Lloyd index (IIT – intra-industry trade) is applied to calculate intra-industry trade. To differentiate between vertical and horizontal intra-industry trade, unit values are utilized, assuming that relative prices reflect relative characteristics, where horizontally differentiated products are homogeneous (perfect substitutes) and possess the same quality, while vertically differentiated products have varying prices reflecting different qualities. A division was also made into high vertical intra-industry trade, characterized by higher-quality exported products, and low vertical intra-industry trade, characterized by higher-quality imported products. The research findings indicate that Poland’s trade in agri-food products with EU countries predominantly exhibits characteristics of vertical intra-industry trade, with the quality of exported products generally surpassing that of imported ones.

한국 ICT산업의 대 아세안 질적 무역 경쟁력 연구: 일본과의 비교를 중심으로

Purpose: The purpose of this paper is to analyze changes in the trade competitiveness of the information and communication technology (ICT) industries in Korea and Japan in the ASEAN market through export competitiveness and intra-industry trade analysis.
 Research design, data, and methodology: The Revealed Symmetric Comparative Advantage Index(RSCA) analysis method is used to measure changes in export competitiveness. In addition, intra-industry trade(IIT) is analyzed by dividing it into vertical intra-industry trade(VIIT) and horizontal intra-industry trade(HIIT), and vertical intra-industry trade(VIIT) is analyzed by dividing it into High Quality Vertical Intra-Industry Trade and Low Quality Vertical Intra-Industry.
 Results: As a result of RSCA analysis, it was found that the Korean ICT industry was comparatively inferior in the ASEAN market between 2010 and 2019, and its competitiveness weakened. By item, the competitiveness of communication apparatus was the lowest, followed by information apparatus, broadcasting apparatus, and parts.
 Meanwhile, unlike Korea, Japan’s ICT industry was found to be competitive in comparative advantage. Among them, broadcasting apparatus were found to be the most competitive, followed by parts, information apparatus, and communication apparatus. According to the IIT analysis, Korea and Japan in the ASEAN market between 2010 and 2019. Both countries were found to be actively engaged in intra-industry trade with ASEAN. In the case of Korea, VIIT was found to be more active than HIIT in trade with ASEAN. Among them, VIITL was found to be the most active. In the case of Japan, VIIT was found to be more active than HIIT, and among them, VIITH was found to be the most active. In other words, overall, it was found that the qualitative competitiveness of Korea and Japan in the ASEAN market improved.
 Implications: This study has academic and political implications in that it analyzed the changes in ICT trade competitiveness between Korea and Japan in the ASEAN market. However, there is a limit to the research in that the change in trade competitiveness in terms of imports was not considered.

한·일 ICT 산업의 대중국 무역 경쟁력 분석

Purpose: The purpose of this paper is to analyze the trade structure and in terms of quality competitiveness of Koreaand Japan’s Information and communications technology(ICT) industry in comparison to that of China. Research design, data, and methodology: Indices such as Revealed Comparative Advantage(RCA) and RevealedSymmetric Comparative Advantage Index(RSCA) are used. Further, an Intra-Industry Trade (IIT) index is used to analyzequalitative changes in Intra-Industry trade of horizontal intra-industry trade, high-quality vertical items and low-qualityvertical items. Results: An analysis of export competitiveness through RSCA analysis showed that the Korean and Japanese ICTindustry’s competitiveness against China is strong, and its competitiveness is gradually improving. By classification, firstof all, in the case of Korea, it was found that parts, broadcasting apparatus, information apparatus, and communicationapparatus were in the order of competitiveness. In addition, the change in competitiveness in 2019 compared to2010 showed that the competitiveness of communication apparatus and information apparatus improved, but thecompetitiveness of broadcasting apparatus and parts weakened. In the case of Japan, the competitiveness of parts,broadcasting apparatus, and communication apparatus was found to be strong, but the competitiveness ofinformation apparatus was weak as they continued to show comparative inferiority. The change in competitiveness in2019 compared to 2010 showed that the competitiveness of information apparatus, communication apparatus, andparts improved, while only broadcasting apparatus weakened. Implications: This study has academic and political implications because it analyzes the changes in ICT tradecompetitiveness between Korea and Japan. However, there is a limitation of this study in that it did not considertrade competitiveness in terms of imports and the factors that determine trade.

Intra-industry Trade in Latvian Agricultural Commodities and Food Products

The share of simultaneous exports and imports of the same types of products by a country or intra-industry trade has gown continuously over the last century. At the same time, share of inter-industry trade when countries specialize in production and trade occurs only between industries has declined. Trade in differentiated products of the same sector and the same stage of processing is referred to as a horizontal intraindustry trade. Such products are close substitutes for each other in terms of factor inputs and consumption. Trade in products of the same sector at different stages of processing is referred to as a vertical intra-industry trade. According to economic theory, a rise in the share of intra-industry trade is occurring within the trade growth in general due to an economic development and broader integration. Since early nineties, Latvia has remained a net importer of agri-food products. At the same time, both exports and imports of agricultural commodities and processed food products has consistently grown, with total trade turnover increasing. The objective of the study is to determine the share of the intra-industry trade and structural changes in the sectors of Latvian agricultural production and food processing over the last decade. To reach the research objectives, Grubel-Lloyd intraindustry trade indexes, Brülhart marginal intra industry trade indexes and Thom-McDowell indexes of total marginal intraindustry trade were compiled for Latvian agri-food trade data over ten years period from 2002 to 2011. The research results show consistently high share of intra-industry trade in total Latvian trade in agricultural commodities and food products over the whole period. A shift from predominantly vertical marginal intra-industry trade towards horizontal marginal intraindustry trade is observed.

A Study on the Trade Competitiveness of Korea to ASEAN in IT Industry

Purpose: The purpose of this paper is to analyze the trade structure and competitiveness of Korea’s information technology (IT) industry in comparison to that of ASEAN, particularly in terms of quality. Research design, data, and methodology: Indices such as trade specialization index (TSI), Revealed Comparative Advantage (RCA), and Market Comparative Advantage (MCA) are used. Further, an Intra-industry Trade (IIT) index is used to analyze qualitative changes in horizontal intra-industry trade and Intra-industry trade of high- and low-quality goods. Results: An analysis of export competitiveness through RSCA analysis showed that the Korean IT industry’s competitiveness against ASEAN is strong, and its competitiveness is gradually improving. By classification, broadcasting devices, parts, communication devices, and information devices were found to be highly competitive. In addition, the competitiveness of broadcasting, parts and communication devices in 2018 compared to 2010 has been shown to be more competitive and improved, but information devices have weakened further. According to the IIT analysis, more than 60% of Korea and ASEAN were made up of trade in the industry, and as of 2018, the ASEAN Korean IT industry had improved qualitative competitiveness compared to 2010. As a result of IIT analysis based on trade volume, HIIT has decreased and VIIT has increased, indicating that trade within horizontal industries is shifting from vertical to vertical industries. The analysis of IIT based on the number of items showed that HIIT is increasing and VIIT is decreasing, unlike the analysis of trade volume. However, as VIITL is decreasing and VIITH is increasing, the qualitative competitiveness of ASEAN Korea IT has improved. Implications: This study has academic and political implications, as it analyzes changes in Korea’s IT trade competitiveness. However, it is somewhat limited as factors determining qualitative aspects has not been considered.

Russian intra-industry trade: Trends in recent decades

The article reveals the trends of Russian intra-industry trade in the period 2001–2018 with the twenty largest partners, united in three groups, namely developed economies, developing countries and CIS states. Intra-industry trade was estimated using data for export and import for each of the 6-digit Harmonized Commodity Description and Coding System product groups. The authors use the Fontanier — Freudenberg and Grubel — Lloyd indices to determine the share of horizontal, vertical and high-quality vertical IIT in agricultural products, raw materials and manufactures. It was revealed that Russia’s intra-industry trade including high-quality vertical IIT, both in terms of value and intensity is highly concentrated on the CIS countries, especially Belarus. A vertical type of intra-industry specialization dominates Russia’s intra-industry trade with all groups of countries, which generally corresponds to global trends. However, the horizontal type of specialization is most pronounced in trade with the CIS countries. It was found that most of the intra-industry exchange takes place in trade in manufactures, mainly with Belarus. The intensity of intra-industry trade in all commodity groups with both developed and developing countries remains very low and has not changed over the period under review. It is noted that during the 2010s, the intensity of all types of intra-industry trade with Belarus and Kazakhstan increased, primarily trade in industrial and agricultural goods, which is largely due to integration. The authors conclude that further integration with this group of countries contributes to the development of intra-industry specialization, export sophistication and the realization of technological advantages.

A Study on the Qualitative Trade Competitiveness of China to Japan in Information Technology Industry

Purpose: The purpose of this paper was to estimate the qualitative trade competitiveness of China with Japan relative to the information technology (IT) industry covering the period from 2007 to 2017. Research design, data, and methodology: Revealed Comparative Advantage (RCA), and Market Comparative Advantage (MCA) are used. Further, an Intra-industry Trade (IIT) index is used to analyze qualitative changes in horizontal intra-industry trade and intraindustry trade of high- and low-quality goods. Results: According to a general comparative advantage analysis, the IT industry has remained relatively inferior in trade with Japan. and mainly exports goods of inferior quality and imports goods of superior quality. Broadcasting equipment and information equipment mainly export inferior quality items and export superior quality items. In the case of electronic and semiconductor parts and equipment, inferior quality items are mainly exported, but the quality of export items has improved. As a result, it cannot be overlooked that the proportion of exports of superior quality items has increased. Also, in the case of communication equipment, it was found that items of inferior quality were mainly exported, but the proportion of exports of superior quality increased significantly, which indicates that the quality of export items has improved. Implications: In the trade with Japan, China’s IT industry’s exports and imports have increased. Although the deficit has decreased, it is still at a relatively disadvantage, especially for semiconductors, broadcasting equipment, and flat-panel display manufacturing equipment. In order to solve these problems, it is necessary to increase the production of high value-added products and further improve the technological level. In this regard, the Chinese government should actively formulate development plans and increase policy and capital investment.

Analysis of Trade Patterns and Duration: Evidence from Food Industry in the OECD countries

This study conducts Kaplan-Meier survival estimates on food trade patterns among the OECD countries and explores whether different survival conditions exist in different t rade patterns of food sub-industries. By applying the extended Cox proportional hazard model, this study examines the effects of consumption on the survival rate for horizontal intra-industry trade pattern at the SITC four-digits level. Our findings show an important policy implication that the stability of horizontal intra-industry trade on the survival duration is driven by consumption in food industry among the OECD countries. Therefore, we suggest that policies should encourage the support of the horizontal intra-industry trade within the food industry to avoid unstable durations of trade in the global supply chain caused by the severe employment adjustments associated with traditional comparative advantage.

Are export earnings from India’s bilateral intra-industry trade with the US and China robust enough?

PurposeThis paper aims to explore whether India’s export basket in the bilateral intra-industry trade (IIT) with two of its top trading partners characterize robust export earnings or not. This is pertinent for two reasons. First, India has a persistent problem of current account deficit for over decades now. Second, whether India’s export diversification strategy by participating in global value chains to improve export share in the world market led to the problem of the fallacy of composition.Design/methodology/approachThis study considers bilateral trade data between India-USA and India-China at the HS-6 digit level over the period 1990–2018. The magnitude of total IIT is computed using the Grubel and Lloyd (1971) index. This paper then uses the unit value dispersion criterion to disentangle the magnitude of total IIT into horizontal and vertical IIT. Through a stepwise econometric exercise, this paper explores the attributes of exported goods in the IIT basket in terms of the directions of ToT, export share and export-price elasticity.FindingsAcross the two country pairs, the major contributors to the upsurge in IIT are five manufacturing industry groups of chemical, plastics and rubber, textiles, base metals and machinery and mechanical appliances. Across the industry groups, the dominant form of IIT has been low vertical IIT. Most of the industry groups do not characterize robust export earnings as the commodity groups have an elastic demand and an increasing trend of Terms of Trade (ToT). The exceptions are the industry groups of chemicals and textiles in India-China and India-USA, respectively.Research limitations/implicationsThe concern of slim export earnings in most industry groups offers scepticism in maintaining the sustainability of the current account. The problem of the fallacy of composition also cannot be ruled out given the dominance of low vertical IIT. This study argues that these industry groups need to engage in labour market reforms and require access to easy credit to achieve competitiveness in the world market.Originality/valueThe analysis performed in this paper attempts to integrate the Prebisch-Singer hypothesis in the context of IIT. Empirical evidence to such an issue is not profound.

AGRICULTURAL INTRA-INDUSTRY TRADE IN SERBIA

Intra-industrial trade is the exchange of products between countries in the same sector of the economy. A significant part of export and import in goods takes place within the same sector of the economy. This paper analyzes the intra-industrial trade in agricultural products of Serbia and its foreign trade partners from 2004 to 2018. The Grubel-Lloyd intra-industrial trade index was used as a measure. The value of GLI in agricultural products increased over the observed period, ranging from 0.485 to 0.590 as in 2018, while the number of IIT-dominated groups ranged from 26 to 35. The results obtained indicate that vertical IIT is more prevalent than horizontal IIT and that the export of products with lower prices dominates, i. e. those that are, according to the assumptions of the model, of lower quality than the imported products. Dynamic change analysis shows that certain changes in the IIT pattern occur over time, but that changes are gradual without sudden peaks in the IIT structure.

Analysis of Export Competitiveness and Intra Industry Trade of Korean Flower: Focusing on Roses, Chrysanthemums, and Lilies

Korean flowers are one of the main exporting items and have played an important role in expanding exports of Korean agricultural products. However, as the export volume has recently decreased, the need to improve the competitiveness of flower exports is increasing. The purpose of this study is to analyze the trend of export competitiveness of Korean flowers by applying RCA (Revealed Comparison Advantage Index) and CAC (Comparative Advantage by Country) and the trade pattern with Japan with high trade volume by using IIT (Intra-Industry. Trade). As a result of the analyses, the weakened export competitiveness of roses, chrysanthemums, and lilies was verified and the trade conditions have deteriorated as Intra-Industry Trade (IIT) is changing from a Horizontal Intra-Industry Trade (HIIT) to a low-quality Vertical Intra-Industry Trade (LQVIIT). Therefore, it is urgent to improve the export competitiveness of Korean flowers. In order to increase the competitiveness of flowers in Korea, the cost reduction should be focused through the localization of seed or bulb, the reduction of labor costs, and the improvement of logistics. The development of emerging markets, including China and Russia, through market research and the continuous breeding are also important.

Industry-level determinants of India's vertical and horizontal IIT.

This paper mitigates the gap in the Indian context about the non-consideration of vertical and horizontal intra-industry trade (IIT) distinctly in testing empirical hypotheses about industry-level determinants of IIT. Our study indicates that failure to segregate vertical and horizontal IIT from the total IIT possibly leads to potential bias in econometric results. Drawing on annual multilateral trade data encompassing two and half decades of the liberalization period, we find India’s IIT outpaced the growth of inter-industry trade over the years and its contribution mainly came from six manufacturing industry groups whose export baskets had been loaded with low vertically differentiated goods. However, horizontal and high vertical IIT have gained some momentum since the end of the last decade. Given the fractional nature of our dependent variable, we initially estimate a (random effects) Tobit model followed by the Exponential Regression of Fractional Response model. The robust econometric findings show that product differentiation has a positive impact only on total IIT. Whereas vertical and horizontal IIT are promoted in industries with concentrated and competitive market structures, respectively. The prevalence of concentrated market structure indicates that (large) Indian firms sustain import competition by specializing in low vertically differentiated goods, as they efficiently adjust to resource reallocation.

Duration and determinants of fishery trade patterns: Evidence from OECD countries

This study performs a survival analysis on fishery trade patterns for fishery products between Organisation for Economic Co-operation and Development (OECD) countries, and investigates whether survival differences of trade patterns exist between major importers and exporters. The results on both fishery products and their respective OECD countries indicate that survival rate and stability of intra-industry trade are higher than those of inter-industry trade, and horizontal intra-industry trade (HIIT) is also higher than vertical intra-industry trade (VIIT). The results are also in line with previous literature, indicating that differentiated products have a longer duration. Survival rates of trade patterns in HIIT increase (lower hazard rate) with average consumption, contiguity, and common language, and decrease (greater hazard rate) with colonial experience. Finally, the policy measures on tariff margins and non-tariff measures are both inconspicuous in HIIT and VIIT, suggesting that the sustainability of HIIT and VIIT comes from the level of average consumption.

Cooperation and Dependence in Relations between the Visegrad Four and Germany

The article examines the limits of economic independence of the Visegrad countries - Poland, Hungary, the Czech Republic and Slovakia - in their relations with Germany as the most important and influential economic partner. The author aims to trace the qualitative transformation of the relations and to discover the ways the Visegrad countries adapt their economies to the changing political, economic, social and technological realities. Methods of quantitative and qualitative dynamic analysis are used. The impact of the crisis caused by the coronavirus pandemic is considered. It is shown that the most important evidence of economic independence is trade in the categories of value added, the dynamics of the sectoral balance of mutual direct investments, as well as the signs of a mature knowledge economy. In the case of the Visegrad Group, dependence on the German economy has not disappeared, but it is moving to a different qualitative level. Based on the provisions of P. Krugman's new theory of international trade the author shows that there is a transition from vertical to predominantly horizontal intra-industry trade. Visegrad countries rely on Germany as a center for the redistribution of their value added, as well as a source of investments to the higher levels of value chains. Nevertheless, the issue of independent determination of their economic agenda is still quite acute for the Visegrad countries.

Patterns and determinants of the horizontal and vertical intra-industry trade of regions: panel analysis for Spain & Poland

ABSTRACTMost of the empirical studies in the literature on intra-industry trade are conducted at the country level. Countries, however, differ in terms of granularity and internal heterogeneity. In the present study we empirically identify the determinants of the overall IIT as well as its horizontal and vertical components in the trade of Spanish and Polish NUTS-2 regions with all existing trade partners over the period 2005–2014. In order to obtain unbiased results, we utilize a semi-mixed effect model, estimated with the PPML method. We estimate the models jointly for all Spanish and Polish regions and then disjointly in a comparative manner – in order to identify incongruities of reaction to the various factors investigated. These include both traditional factors and a number of unorthodox factors such as regional path dependence, quality of regional institutions, the core or peripheral status of the reporting region.

Country-Specific Determinants of Intra-Industry Trade in India

A distinctive feature of India’s trade liberalization has been a significant rise in the magnitude of intra-industry trade (IIT). India’s total IIT is substantially large with high and upper-middle-income group countries and dominated by low vertical IIT. Particularly during the second phase of economic reforms, magnitude of India’s vertical IIT with high-income group of countries had increased; while there had been a marginal decline in horizontal IIT. This article identifies some of the determinants of India’s total IIT as well as vertical and horizontal IIT with her major trading partners from 1990 to 2014. The convergence in the level of economic development between India and her trading partner(s) positively influences total IIT and its two broad forms. Similarity in relative factor endowments and regional trade agreement through South Asian Free Trade Area (SAFTA) is found to promote horizontal IIT. Having a large market size, the distortionary impact of tariff has not been able to dampen the magnitude of India’s IIT. Relative depreciation of trading partner’s real exchange rate enhances India’s imports and inhibits the growth of total and vertical IIT. Geographical distance adversely affects all forms of IIT.JEL Codes: C23, F14

The Qualitative Trade Competitiveness of China in IT Industry: A Comparison to Korea and USA

Purpose - The purpose of this paper is to analyze the trade structure and competitiveness of China’s information technology (IT) industry in comparison to that of Korea and the United States, particularly in terms of quality. Design/methodology/approach - Indices such as trade specialization index (TSI), Revealed Comparative Advantage (RCA), and Market Comparative Advantage (MCA) are used. Further, an Intra-industry Trade (IIT) index is used to analyze qualitative changes in horizontal intra-industry trade and intraindustry trade of high- and low-quality goods. Findings - China’s IT industry has a comparative competitive advantage over that of Korea and the United States, and mainly exports goods of inferior quality and imports goods of superior quality. Further, China’s horizontal intra-industry trade has been decreasing, while its vertical intra-industry trade has been increasing and vertical trade of inferior quality goods outweighs that of superior quality goods. This shows that China is rapidly catching up with Korea and the United States, even though its qualitative competitiveness has not significantly improved. Research limitations/implication - This study has academic and political implications, as it analyzes changes in China’s IT trade competitiveness. However, it is somewhat limited as factors determining qualitative aspects has not been considered. Originality/value - Most studies aggregate analyses of export competitiveness using methodologies such as TSI, RCA, and market share. However, the focus of these methods is price competitiveness. Hence, an examination of the objective and qualitative trade competitiveness of China’s IT industry is necessary. this study the trade structure and quantitative competitiveness of the industry by analyzing intra-industry trade focusing on the quality of competitiveness. Therefore, the changes in China s IT industry in the USA and Korea and in foreign trade competitiveness and quality competitiveness are clarified. The results show that the academic and policy implications of these changes in the IT industry will be a useful resource. This is the first study in Korea to attempt such an analysis. This is the first study in Korea to attempt such an analysis.

PATTERNS AND DETERMINANTS OF INTRA-INDUSTRY TRADE IN SOUTHEAST ASIA: EVIDENCE FROM THE AUTOMOTIVE AND ELECTRICAL APPLIANCES SECTORS

Using finely disaggregated data at six-digit harmonized code classification level, this paper examines the patterns and determinants of horizontal and vertical intra-industry trade in the automobile and electrical appliances sectors during the past few decades among the six major Southeast Asian countries. It is found from the analysis of the data that intra-industry trade is much higher than the inter-industry trade in each of these two sectors. Further, the determinants of these two types of trade are found to differ somewhat in terms of sign and magnitude across the sectors, implying the importance of sector-specific factors as influences on the pattern of trade.

Horizontal Intra-Industry Trade in Korea: A Dynamic Panel Data Analysis

This study investigates the patterns and determinants of Korea’s horizontal intra-industry trade by employing a dynamic panel data analysis. The main findings of the study are as follows. An increase in the market size of both trading partners is associated with a higher level of horizontal intra-industry trade. Dissimilar economic sizes and per capita incomes have a negative effect on trade in horizontally differentiated products. Geographical distance and trade imbalance serve as obstacles to horizontal intra-industry trade. These findings have policy implications for reconsidering the orientation of promoting trade. Inclusive economic growth in the region, taking advantage of neighboring nations and making efforts to reduce trade imbalances between trading economies, can accelerate further trade expansion through horizontal intra-industry trade.