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Horizontal and Vertical Intra-Industry Trade in Trans-Tasman Bilateral Trade

Author

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  • Sharma, Kishor

    (Charles Sturt University)

Abstract

This paper disentangles trans-Tasman intra-industry trade (IIT) into horizontal IIT (HIIT) and vertical IIT (VIIT), and uses country-specific features to investigate their determinants in an econometric framework. Results suggest that trans-Tasman IIT is dominated by VIIT and concentrates mainly (about 50%) on two highly protected industries, namely machinery and equipment, and textile, clothing and footwear. This suggests that the closer economic relations (CER) may be contributing to trade diversion rather than trade creation. It appears that despite similarity in resource endowments between Australia and New Zealand the determinants of HIIT and VIIT are sensitive to the country specific characteristics. Hence, assuming similarity across countries in cross-country studies is unjustifiable.

Suggested Citation

  • Sharma, Kishor, 2004. "Horizontal and Vertical Intra-Industry Trade in Trans-Tasman Bilateral Trade," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 19, pages 590-603.
    • Handle: RePEc:ris:integr:0300
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    Cited by:

    1. Sakshi Aggarwal & Debashis Chakraborty, 2021. "Which Factors influence Vertical Intra-Industry Trade in India? Empirical Results from Panel Data Analysis," Working Papers 2154, Indian Institute of Foreign Trade.

    More about this item

    Keywords

    Intra-industry trade; horizontal IIT; vertical IIT and closer economic integration;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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