Intra-industry trade: a statistical artefact or a real phenomenon?

Abstract

Economists have been discussing the phenomenon of intra-industry trade, whereby trade has taken place for at least fifteen years between countries in products that are essentially the same as those that can be produced domestically. Arguments rage between those who see such trade as a true economic phenomenon and those who believe it is largely a statistical phenomenon that would disappear if appropriate industry definitions were used. The author concludes that neither side have proved their case and that existing trade data is inadequate for such a purpose. JEL: F10

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