Abstract
There is a long established thread of the international trade literature concerned with the measurement of intra-industry trade (IIT). Two distinct strands of the literature have developed: First, measures of marginal IIT that are concerned with the adjustment implications of volume-based changes in IIT; second, measures of vertical and horizontal IIT that are concerned with qualitybased differences in IIT. This paper marries the two literatures to provide a new perspective on the smooth adjustment hypothesis debate and suggests the use of the marginal product quality index, a new measure of changes in quality in matched trade changes that complements dynamic measures of volume-based IIT.
Original language | English |
---|---|
Pages (from-to) | 225-247 |
Number of pages | 23 |
Journal | Review of World Economics |
Volume | 144 |
Issue number | 2 |
DOIs | |
Publication status | Published - 1 Jan 2008 |
Keywords
- quality
- adjustment costs
- intra-industry trade
- product differentiation