1st Edition

Determinants of Intra-Industry Trade The Case for United States-Canadian Trade, 1967-1982

By Janice G. Yee Copyright 1997

    While most international economists will note that trade is beneficial, they will also comment on the adjustment costs that are usually incurred when factors of production, most notably labor, are redistributed between industries. A goal for many policymakers is to make that adjustment process easier and smoother for the factors involved, thereby highlighting the benefits of trade, rather than the costs of trade. But what are these industries that experience smoother adjustment costs? There is a growing constituency which believes that intra-industry or like trade is a characteristic of an industry with low adjustment costs. First published in 1997, this book hopes to address some of these issues and add to the growing discussion on the topic of intra-industry trade, with special attention placed on the relationship between the U.S. and Canada.

    Introduction A Brief History of U.S.—Canadian Trade Relations 2.1 Implications of IIT on the FTA The Evolution of Intra-Industry Trade 3.1 Theoretical Models of Intra-Industry Trade 3.2 Empirical Evidence of IIT 3.3 Econometric Analyses 3.4 Concluding Remarks The Statistical Model 4.1 The Dependent Variable 4.2 Independent Variables 4.3 Methodology and Data V. Empirical Observations and Results 5.1 The Caves Data 5.2 The Bowen Data 5.3 Summary VI. Conclusions