%0 Journal Article
%T Vertical and Horizontal Intra-Industry Trade between the U.S. and NAFTA Partners
%A E.M. Ekanayake
%A Bala Veeramacheneni
%A Carlos Moslares
%J Revista de An¨¢lisis Econ¨®mico (RAE)
%D 2009
%I Georgetown University, Universidad Alberto Hurtado
%X The main objectives of this paper are to (a) explain the extent of vertical and horizontal intra-industry trade in the United State¡¯s foreign trade with the North American Free Trade Area (NAFTA), and (b) identify the industryspecific determinants of vertical and horizontal intra-industry trade. One of the main findings is that the observed increase in intra-industry trade between the United States and NAFTA is almost entirely due to two-way trade in vertical differentiation. Another important finding is that the share of horizontal intra-industry trade has increased significantly during this period, although vertical intra-industry trade continued to be dominant in the U.S.-NAFTA IIT Trade. Among the industry-specific variables, product differentiation, vertical product differentiation, and product quality differences are found to have a positive effect on all three types of IIT shares. Industry concentration and industry size are found to have a negative and statistically significant effect on all three types of IIT share.
%U http://www.rae-ear.org/index.php/rae/article/view/86