Country-specific determinants of intra-industry trade in Portugal

• Autor(a) principal: Faustino, Horácio C.
• Data de Publicação: 2007
• Outros Autores: Leitão, Nuno Carlos
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.5/2596
• topic: Intra-Industry Trade; Horizontal Intra-Industry Trade; Vertical Intra-Industry Trade; Linder Hypothesis; Dynamic Panel Data

Based on the theoretical models of Helpman and Krugman (1985), Falvey and Kierzkowski (1987) and Flam and Helpman (1987) and on the empirical studies of Greenaway, Hine and Milner (1994) and Hummels and Levinsohn (1995), we use a static and dynamic panel data approach to test the country-specific determinants of Portuguese intra-industry trade (IIT). We include income variables together with supply-side variables in order to test the demand similarity and factor endowments difference hypotheses. The results suggest that the Linder hypothesis is confirmed and that differences in income levels have a positive (negative) effect on vertical IIT (horizontal IIT and IIT). However, our findings only partially confirm Helpman and Krugman's theoretical predictions.