An analysis of bilateral intra-industry trade in the food processing sector

Abstract

This paper analyses determinants of intra-industry trade in food processing for a 30-country sample over the period 1964-85. Previous studies have tested the hypothesis that imperfect competition is a major determinant of intra-industry trade (IIT) in the durable goods manufacturing sectors. This study is distinguished from the earlier studies of IIT by; the examination of the processed food sector (SIC = 20), the use of a panel data set for 22 years and 30 countries available at the four-digit SIC level, the use of purchasing power parity measures of GDP, and the use of a weighted tobit model with fixed effects to account for the censored cross-section time-series nature of the data. The re..