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National Determinants of Intra-industry Trade in Argentina
Intra-industry trade (IIT) is a growing component of world trade, especially in developed countries. It generates less redistributive effects and lower demands for protection. In these countries, the empirical evidence on its determinants is wide, but it is not the case for Latin American countries....
Intra-industry trade (IIT) is a growing component of world trade, especially in developed countries. It generates less redistributive effects and lower demands for protection. In these countries, the empirical evidence on its determinants is wide, but it is not the case for Latin American countries. In this paper a gravity equation is estimated using panel data in order to find the national determinants of the two-way trade in Argentina. The results show that IIT is positively related to the demand complexity of the trading partner and its market size as well as the existence of common cultural ties. Besides, it is negatively related to geographical distance and trade concentration. This is a unique empirical contribution to the Argentinean case, and it may also be relevant for other countries in the region.
