Intra-Industry Trade, Reconsidered: The Role of Technology Transfer and Foreign Direct Investment

22 Pages Posted: 15 Nov 2007

See all articles by Toshihiro Okubo

Toshihiro Okubo

University of Geneva - Graduate Institute of International Studies (HEI)

Abstract

This paper investigates novel determinants of intra-industry trade (IIT) of late 1990s Japanese trade. Our empirical analysis shows that IIT is increased not only by the similarity of GDP and factor endowment but also by technology transfer via Japanese FDI. In particular, the current high proportion of Japanese IIT with Asian countries can be explained by technology transfer (licensing between headquarters and overseas affiliates) via FDI.

Suggested Citation

Okubo, Toshihiro, Intra-Industry Trade, Reconsidered: The Role of Technology Transfer and Foreign Direct Investment. The World Economy, Vol. 30, No. 12, pp. 1855-1876, December 2007, Available at SSRN: https://ssrn.com/abstract=1029818 or http://dx.doi.org/10.1111/j.1467-9701.2007.01073.x

Toshihiro Okubo (Contact Author)

University of Geneva - Graduate Institute of International Studies (HEI) ( email )

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