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Intra-industry trade efficiency and gains from trade “Evidence from high- and middle-income countries”

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Abstract

This paper investigates the bidirectional relationship between Intra-industry trade efficiency (IITE) and welfare gains from trade. The determinants of IIT taken form the literature, includes research and development, relative comparative advantage, product differentiation, economies of scale, consumer price index and total factor productivity. Data Envelopment Analysis (DEA) for deriving efficiency scores is applied and gains from trade in differentiated products are supposed to be obtained through three channels: decrease in price, improvements in productivity and increase in the variety. Using data on 22 high-income countries and 20 middle-income countries over 2001 to 2017, the bidirectional relationship between the considered sources of gains from trade and IITE has been confirmed, and the results support the hypothesis of the differences between the importance of the factors determining efficiency of intra industry trade in two groups of considered countries.

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Data availability

The datasets generated during and/or analyzed during the current study are available from the corresponding author on reasonable request.

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  1. University of Mazandaran, Babolsar, Iran

    Zahra Sheidaei

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  1. Zahra Sheidaei
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Sheidaei, Z. Intra-industry trade efficiency and gains from trade “Evidence from high- and middle-income countries”. SN Soc Sci 2, 213 (2022). https://doi.org/10.1007/s43545-022-00523-4

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