Abstract
Intra-industry trade is trade among countries with similar factor endowments and in commodities with similar factor intensities (Davis, 1995, p. 204). According to the HO theory, such trade must be nonexistent.2 Not so in the real world. Trade among countries in the European Union has been developing fast, and intra-industry trade much faster than the rest of the trade. Thus, countries are not only specializing in products of different industries but also in different varieties of the same commodity from within the same industry. What are the reasons for intra-industry trade? The reasons are many and they have nothing to do with factor proportions.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Author information
Authors and Affiliations
Copyright information
© 1999 Branko Horvat
About this chapter
Cite this chapter
Horvat, B. (1999). Intra-Industry Trade. In: The Theory of International Trade. Palgrave Macmillan, London. https://doi.org/10.1057/9780333983386_13
Download citation
DOI: https://doi.org/10.1057/9780333983386_13
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-40784-2
Online ISBN: 978-0-333-98338-6
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)