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Comparative Advantage and the Pattern of Trade within Industries

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  • Durkin, John T, Jr
  • Krygier, Markus

Abstract

This paper investigates empirically one aspect of the vertically differentiated-models of intraindustry trade. These models predict that the pattern of trade within an industry is based on comparative advantage rather than being completely random. An empirical model is specified in which the relative quality of two countries' bilateral exports within an industry depends on the relative differences in unit labor requirements. Using a variety of econometric methods, the results suggest that the quality of US manufacturing exports to the United Kingdom, Japan, and Germany relative to its imports from these countries is positively and significantly related to the relative differences in value added per worker. Copyright 1998 by Blackwell Publishing Ltd.

Suggested Citation

  • Durkin, John T, Jr & Krygier, Markus, 1998. "Comparative Advantage and the Pattern of Trade within Industries," Review of International Economics, Wiley Blackwell, vol. 6(2), pages 292-306, May.
    • Handle: RePEc:bla:reviec:v:6:y:1998:i:2:p:292-306
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    Cited by:

    1. Mika Saito, 2000. "The Empirical Investigation of The Kemp-Jones Model: The Case of OECD Countries," Econometric Society World Congress 2000 Contributed Papers 1159, Econometric Society.
    2. Yener Kandogan, 2003. "Intra-industry Trade of Transition Countries: Trends and Determinants," William Davidson Institute Working Papers Series 2003-566, William Davidson Institute at the University of Michigan.

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