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Citation
No Title
1 (Measuring Gravity in International Trade Flows)  / 2004 /  SSRN Electronic Journal

10.2139/ssrn.3078475
2 : (On the Determinants of Intra-Industry Trade: Specialization and Relative Factor Endowments)  / 2007 /  SSRN Electronic Journal

10.2139/ssrn.3078339

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East Asian Economic Review Vol. 4, No. 4, 2000. pp. 35-58.

DOI https://dx.doi.org/10.11644/KIEP.JEAI.2000.4.4.72

Number of citation : 2

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Intra-industry Trade and the Gravity Equation: A Cournot-Ricardo Approach

Author

E. Young Song

Sogang University

eysong.econ@gmail.com
Creative Commons Attribution License

EAER is an open access journal distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license.

Abstract

This paper shows that Cournot competition in segmented markets generate both intra-industry trade and the gravity equation. The paper also demonstrates that the gravity equation holds if and only if the market shares of an exporting country do not depend on the market where it sells. Thus, the widely accepted wisdom that specialization generates the force of gravity is not well grounded on theory.

JEL classification: F11, F12

Keywords

Intra-industry Trade, Gravity, Cournot

Language

English

References

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