41 Pages Posted: 29 Jul 2000
Date Written: June 1993
In this paper, we test some propositions about international trade flows that are derived from a model of monopolistic competition developed by Elhanan Helpman. We investigate whether the volume of trade between OECD countries is consistent with the predictions of a modal in which all trade is intra-industry trade in differentiated products. We then repeat the test with non-OECD countries. We also investigate whether the share of intra-industry trade is consistent with a more general theoretical model in which some, but not all, trade is intra-industry trade. Our results lead us to question the apparent empirical success of these models.
Suggested Citation: Suggested Citation
Hummels, David L. and Levinsohn, James A., Monopolistic Competition and International Trade: Reconsidering the Evidence (June 1993). NBER Working Paper No. w4389. Available at SSRN: https://ssrn.com/abstract=232061