Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/98300
Authors: 
Sharma, Kishor
Year of Publication: 
1999
Series/Report no.: 
Center Discussion Paper 813
Abstract: 
This paper the presents pattern and determinants of intra-industry trade (IIT) in Australian manufacturing since the late 1970s. The results point to a sharp rise in IIT from the mid 1980s which appears to be linked with an outward-oriented policy. Industry level analysis indicates that industries which experienced a sharp fall in protection are the industries with the higher levels of IIT. These include textile, garments, rubber products, and machinery and equipment. An increasing trend in IIT suggests that the short-term adjustment costs associated with trade liberalisation are likely to be lower, and that liberalisation can proceed without huge short-term adjustment costs. Using a logit model the determinants of IIT are investigated. Results indicate that intra-industry trade is positively related to product differentiation and scale economies, and negatively related to the levels of protection and foreign ownership in the pre-liberalisation period. In the post-liberalisation period, however, it is scale economies that explain the inter-industry variations in IIT. R&D intensity and close economic integration appear to have no impact on IIT regardless of the nature of the policy regime.
Subjects: 
Intra-industry trade
trade liberalisation
outward-orientation
JEL: 
F13
F14
Document Type: 
Working Paper

Files in This Item:
File
Size
53.18 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.