On the Measurement of Changes in Product Quality in Marginal Intra-Industry Trade

Robert Elliott, AKM Azhar

Research output: Contribution to journalArticle

14 Citations (Scopus)

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 languageEnglish
Pages (from-to)225-247
Number of pages23
JournalReview of World Economics
Volume144
Issue number2
DOIs
Publication statusPublished - 1 Jan 2008

Keywords

  • quality
  • adjustment costs
  • intra-industry trade
  • product differentiation

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