As for example, China imports computer parts from the western countries and uses its cheap labor power to assemble the imported parts in a labor-intensive final phase of production, before the finished product (computers) is again exported to the US and Europe. In the context of trying to place the concept of intra-industry trade within a frame of economic theories, a question arises, as to why countries concurrently export and import the same products, or products belonging to the same industry type? In an answer to this question, Nigel Grimwade claimed, “an explanation cannot be found within the framework of classical or neo-classical trade theory. The latter predicts only inter-industry specialization and trade”. However, this is not justified and inter-trade industry can be explained largely by economic theories. The traditional trade pattern was based on models proposed by Ricardo and the Heckscher–Ohlin model that attempted at construing activities that take place within the realms of international trade. In both the models, there is the notion of comparative advantage with an analysis of why nations choose to conduct trade. Inter Industry and Intra Industry Trade.
Blaug, M., 1992. The methodology of economics, or, How economists explain. Cambridge:
Cambridge University Press.
Brander, J., 1981. Intra industry trade in identical commodities. Journal of
International Economics 11, 1-14.
Davis, D., 1995. Intra-Industry Trade: A Heckscher-Ohlin-Ricardo Approach. Journal of
International Economics 39, 201-226.
Falvey, R., 1981. Commercial policy and intra-industry trade. Journal of International
Economics 11 (4), 495–511.
Falvey, R., and Kierkowski, H., 1987. “Product Quality, Intra-Industry trade and (im)perfect
Competition.” In, H. Kierkowski (ed.), Protection and Competition in International
Trade, NY: Basil Blackwell.
Finger, J., 1975. Trade Overlap and Intra-Industry Trade. Economic Inquiry 13, 581-589.
Grimwade, N., 2000. International Trade: New Patterns of Trade, Production &
Investment. New York: Routledge.
Grubel, H., and Lloyd, P., 1975. Intra-Industry Trade: The Theory and Measurement of
International Trade in Differentiated Products. New York: John Wiley.
Handjiski, B., Lucas, R., Martin, P., and Guerin, S., 2010. Enhancing Regional Trade
Integration in Southeast Europe. World Bank Working paper no. 185. Retrieved from,
http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2010/02/19/000333037_20100219001121/Rendered/PDF/530990PUB0regi101Official0Use0Only1.pdf [accessed 24th October 2012.
Kemp, M., 2008. International Trade Theory: A Critical Review. London: Routledge
Krugman, P., and Obstfeld, M., 1991. International Economics: Theory and Policy. New
York: Harper Collins.
Krugman, P., 1980. Scale Economies, Product Differentiation and the Pattern of Trade.
American Economic Review 70, 950-959.
Marvel, H., and Ray, E., 1987. Intra-industry Trade: Sources and Effects on Protection.
Journal of Political Economy 95, 1278–91.
OECD, 2007. Glossary of Statistical terms. Retrieved from
http://stats.oecd.org/glossary/detail.asp?ID=7263 [accessed 25th October 2012]
Ruffin, R., 1999. The Nature and Significance of Intra-industry Trade. Federal Reserve Bank of Dallas. Retrieved from
http://www.dallasfed.org/assets/documents/research/efr/1999/efr9904a.pdf [accessed 25th October 2012]
Please type your essay title, choose your document type, enter your email and we send you essay samples