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Taking Grubel and Lloyd to dance in the city: Domestic intra-industry trade in China

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  • Egger, Peter H.
  • Li, Jie
  • Ouyang, Jie

Abstract

We assess theoretical predictions regarding the determinants of domestic intra-industry trade in large panel data of pairs of 276 cities, as well as 42 sectors, over three years in China. We find that geographical and technological distances are the main impediments of intra-industry trade, being more important than relative endowment differences. This confirms expectations based on new trade theory in a novel data environment.

Suggested Citation

  • Egger, Peter H. & Li, Jie & Ouyang, Jie, 2024. "Taking Grubel and Lloyd to dance in the city: Domestic intra-industry trade in China," Economics Letters, Elsevier, vol. 244(C).
    • Handle: RePEc:eee:ecolet:v:244:y:2024:i:c:s0165176524004099
    DOI: 10.1016/j.econlet.2024.111925
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    More about this item

    Keywords

    Intra-industry trade; Input–output data; New trade theory;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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