Intra-industry trade: Revisiting theory and literature survey



Abstract. Early references to intra-industry trade were mostly ignored for many years. It was only in the past two decades that intra-industry trade has received significant attention and has become a leading area for international economists. It has become increasingly common in recent decades due to the growth of international trade, globalization, and the integration of economies. Intra-industry trade can benefit countries by allowing them to specialize in their areas of comparative advantage and to access a wider range of products and services at lower prices. However, it can also pose challenges for some industries and workers who may face increased competition from foreign producers. The purpose of this paper is to review the extensive literature on intra-industry trade, assess the accomplishments of researchers in this area and predict future research directions. The paper evaluates intra-industry trade as a research program and assesses whether it can continue to advance in the future. To organize the paper, the authors evaluate current perspectives in four distinct areas: theory, measurement, empirical evidence, and policy aspects.

Keywords. Intra-industry trade; Imperfect competition; Classical theories of trade.

JEL. F11; F12; F13.


Intra-industry trade; Imperfect competition; Classical theories of trade.

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