This paper examines the development in the intra-industry trade pattern in two small open economies within the period 1961-1987. We compute Grubel-Lloyd indices and examine both the time pattern, the country pattern, and the product pattern. For both countries the level of intraindustry trade has grown rapidly and product differentiation has increased. However, this process occurred later in Ir...

International trade specialisation reflects differences in relative factor productivity and endowments, economies of scale or specific advantages of firms and it can have a significant impact on economic growth. We focus in this paper on trade specialisation dynamics in two Eastern European countries (Romania and Bulgaria – EEC-2) vis-à-vis the EU member states (EU-25). Specifically, we are int...

This paper looks at the issue of labour market adjustment in the context of expanded international trade of NAFTA economies both within the region and more generally. The study focuses on the period 1990-1998, a time-frame which covers several years prior to and after the formation of NAFTA. Trade flows of the member countries are analysed using measures of static intra-industry trade (IIT) and...

Endowment based economic models with constant returns to scale and perfect competition have been a primary theoretical basis for analyzing political preferences of domestic actors. However, it is well known that such class of model is inadequate in explaining the large volume of intra-industry trade. How do we understand distributive consequences of trade policy of industrialized countries espe...

Recently, a new resolve for both increased economic integration and monetary and exchange rate cooperation has started to emerge in ASEAN, especially since the 19971998 Asian financial crisis. According to the optimum currency area theory, the degree of trade integration is one most important criterion for joining a currency union. The large increase in intra-ASEAN trade in recent years natural...

To examine how changes in relative national prices affect trade flows, this study estimates the impact of industry-specific effective real exchange rates on industry-level balances, exports, and imports. We analyze variations intra-industry vertical specialization, which may both govern long-run relationship between flows. employ sample information from 13 manufacturing industries across five A...

Recent theoretical models predict gains from international trade coming from intra-industry reallocations, due to a firm selection effect. In this paper we answer two related questions. First, what is the magnitude of this selection effect, and how does it compare to that of intra-national trade? Second, would the removal of ’behind-the-border’ trade frictions between integrated EU countries le...

The paper analyses vertical intra-industry trade between EU and Accession countries, and concentrates on two country-specific determinants: Differences in personal income distribution and in technology. Both determinants have a strong link to national policies and to cross-border investment flows. In contrast to most other studies, income distribution is not seen as time-invariant variable, but...

U.S. foreign trade has grown much more rapidly than GDP in recent decades. But there is no consensus as to why. More than half of U.S. foreign merchandise trade consists of armslength and intra-firm trade by multinational corporations (MNCs). But prior empirical work on the growth of trade has not focused on the role of MNCs. To better understand the growth of trade, it is important to understa...