This paper builds a dynamic industry model with heterogeneous firms that explains why international trade induces reallocations of resources among firms in an industry the paper shows how the exposure to trade will induce only the more productive firms to enter the export market (while some less. The impact of trade on intra-industry re-allocation and aggregate industrial productivity november 2003 econometrica this paper develops a dynamic industry model with heterogeneous firms to analyze the intra-industry effects of international trade. Years7 intra-industry trade in rubber products rose from about 7 per cent in 1979/80 to 22 per cent in 1992/93, and in motor vehicles and parts it increased from about 17 per cent to about 31 per cent in the same period. Intra-industry trade refers to the exchange of similar products belonging to the same industry the term is usually applied to international trade, where the same types of goods or services are both imported and exported. Intra-industry trade came later (in the 1980s and 1990s) with the new trade literature, to a large extent based on a monopolistic competition framework world economy intra-industry trade.
The intra-industry trade measures have greater coefficients than that for trade intensity, about 3 times on average, indicating that the intra-industry trade measure has a greater influence on the output correlations than the trade intensity measure. Cepr discussion paper no 4634 september 2004 abstract the impact of trade on intra-industry reallocations and aggregate industry productivity: a comment. The impact of trade on intra-industry reallocations and aggregate industry productivity mark j melitz nber working paper no 8881 issued in april 2002.
The evaluation of technological sophistication is based on unctad's methodology, while the intensity of intra-industry trade is measured by the gl-index and identification of its subcategories (horizontal and vertical trade. Intra-industry trade ie scale effect, selection effect and technique effects in the saarc region are to be assessed in this study the overall results of this study indicate that if intra. Our understanding of the gains from trade & the potential income distribution effects of trade external economies of scale when the average cost of a firm falls as the industry grows larger, but may or may not rise as the firm grows larger. The impact of trade on intra-industry reallocations and aggregate industry productivity: an empirical investigation anders ¯kerman department of economics, stockholm university.
The impact of intra-industry trade on the environment countries with tougher environmental standards to the lower-income countries which require lower environmental standards. Marc j melitz (born january 1, 1968) is an american economisthe is currently a professor of economics at harvard university melitz has published a number of highly cited articles in the area of international economics and international trade, most notably the impact of trade on intra-industry reallocations and aggregate industry productivity in econometrica which explores the effects of. Trade effect the extent of the impact will depend on the size and pattern of trade countries have either with the us or with third-party nations that trade with it, ghanem said. If intra-industry trade is measured at a particular level of disaggregation by the ratio of net trade to gross trade [balassa, i966 ], then the absence of overall trade balance or matching for the range of transactions under con.
Intra-industry trade arises because consumers desire different product qualities in accordance with their income levels, and because the range of qualities produced in each country differs from the range of qualities desired. The intra-industry trade (iit) or two-way trade is defined as simultaneous exports and imports of a product within a country or a particular industry the link between immigration and intra-industry trade was explained in the.
You have printed the following article: the impact of trade on intra-industry reallocations and aggregate industry productivity marc j melitz econometrica, vol 71, no 6. Export diversification and intra-industry trade in africa informed by the patterns of trade in african economies, constraints towards export diversification and intra-industry trade are. Econometrica, vol 71, no 6 (november, 2003), 1695-1725 the impact of trade on intra-industry reallocations and aggregate industry productivity by marc j melitz1 this paper develops a dynamic industry model with heterogeneous ﬁrms to analyze.