Munich Personal RePEc Archive

Intra-Industry Trade and Differences in Technology

Gilroy, Bernard Michael and Broll, Udo (1988): Intra-Industry Trade and Differences in Technology.

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Abstract

The approach focussed on allows one to examine theoretically the empirical observation of increasing levels of intra-industry trade flows founded upon an increasing similarity of technology between countries and firms. Within the framework of a simple model of international trade in differentiated goods it is demonstrated that an in an international free trade scenario ranking high in product differentiation and monopolistic market structures the intensity of intra-industry trade is dependent upon the degree of differences present in applied technology. Technologlcal similarity among nations results in high levels of intra-industry trade; whereas persistent differences in available technology reduces intra-industrial trade flows.

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