According to the “smooth adjustment hypothesis”, the labour-market adjustment costs entailed by trade liberalisation are lower if trade expansion is intra-industry rather than interindustry in nature. In this paper, we study the link between trade and labour market changes in UK manufacturing industries during the 1980s. We use industry-level measures of unemployment duration and wage variabili...

Previous theoretical contributions on endogenous tariff formation have focused on trade models with homogeneous goods and constant returns to scale. This paper investigates the political equilibrium of trade policy when economic structure is instead characterized by differentiated products and increasing returns to scale and there exists intra-industry trade. The result shows that endogenous ta...

Within the framework of an n-commodity, n-factor, K-country loglinear model with identical Cobb–Douglas production coefficients and identical consumer-expenditure shares across countries, balanced trade, and a pattern of world endowments permitting positive outputs of all commodities in each country, it is shown that, given any mode of aggregating the n commodities into at most n − 1 industrial...

This paper analyses the scope for collusive behaviour within the context of an international duopoly supergame in which both firms and monopoly labour unions interact strategically. We find that the presence of unions, implying an endogenisation of production costs, dramatically alters the incentives for inter-firm collusion. There are, however, strong incentives for the unions to collude, rais...

The purpose of this article is to investigate the impact of marginal intra-industry trade on economic growth. The results indicate that economic growth is a dynamic process. The change of intra-industry has a positive impact on economic growth. This paper confirms relevant theoretical hypothesis as foreign direct investment and globalization promote the economic growth.

As a result of rapid economic growth and increased influence of globalization in international trade activities, intra-industry trade (IIT) becomes prominent across Asia including Malaysia. Free trade agreements and creations of free trade areas have encourage increased cross border investments through production networking as well as fragmentation of production, especially in manufacturing sec...

In this study we examine the widely held view that intra-industry trade (IIT) entails relatively low adjustment costs. We construct a panel of industry level trade, production and employment data for Ireland. IIT is calculated using the conventional Grubel-Lloyd index as well as alternative measures of marginal IIT. Our measure of labour adjustment is defined as the share of intra-industry job ...

Recent developments, including the analysis of firm-level adjustment to falling trade costs, have contributed to a revival of interest in intra-industry trade (IIT). Most empirical work still relies on the standard Grubel-Lloyd measure. This however refers only to international trade, disregarding income flows stimulated by repatriated profits of multinational firms. Given the overwhelming impo...

This paper sets up a two country monopolistic competition model with intra-industry trade to study the effects of an exogenous differential in wage and social policies on the location of industry. Two model scenarios are considered. In the traditional one with physical capital, such a differential induces a relocation effect which increases with the level of trade integration. The ‘new economic...