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Dynamics of Intraindustry Trade and Labor‐Market Adjustment

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  • Marius Brülhart

Abstract

This paper investigates some dynamic aspects of the ‘smooth adjustment hypothesis’ that is commonly associated with intraindustry trade (IIT). The analysis is conducted on a panel of plant‐level employment data and industry‐level production and trade data for Ireland. Rates of intraindustry job turnover are used as a proxy for labor‐market adjustment. Three findings stand out. First, a measure of marginal IIT is found to be more appropriate for the analysis of adjustment issues than the traditional static IIT index. Second, the effect of marginal IIT on labor‐market adjustment is most significant in the short term, namely for indices calculated on one‐year ntervals and lagged by one year. Third, the most significant determinants of the intraindustry job turnover rate are sector‐level plant concentration ratios and trade openness.

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  • Marius Brülhart, 2000. "Dynamics of Intraindustry Trade and Labor‐Market Adjustment," Review of International Economics, Wiley Blackwell, vol. 8(3), pages 420-435, August.
    • Handle: RePEc:bla:reviec:v:8:y:2000:i:3:p:420-435
    DOI: 10.1111/1467-9396.00232
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    Cited by:

    1. Sakshi Aggarwal & Debashis Chakraborty, 2020. "Labour Market Adjustment and Intra-Industry Trade: Empirical Results from Indian Manufacturing Sectors," Journal of South Asian Development, , vol. 15(2), pages 238-269, August.
    2. Sakshi Aggarwal & Debashis Chakraborty, 2020. "Is there any relationship between Marginal Intra-Industry Trade and Employment Change? Evidence from Indian Industries," Working Papers 2044, Indian Institute of Foreign Trade.

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