Recent Trends in European Trade

Teit Lüthje 사람과세계경영학회 2011 Global Business and Finance Review Vol.16 No.2

This article investigates whether European integration has led to increased trade and specialization among the member countries of the European Union. We find an increasing trend in the internal trade among the EU15 countries and that trade with new member countries is also increasing. The export of most EU15 countries is nearly evenly distributed on goods. Furthermore, we characterise European trade to see the driving factors behind this trade. Foreign trade in varieties of different quality dominates the trade between European countries as a consequence of the rising standards of living generated by the European integration. This trade is relatively high among large economies and economies in close proximity to each other. Finally, we see that the increase in trade in varieties of different quality is relatively larger among poor countries than among rich countries.

IS INTRA-INDUSTRY TRADE IN REALITY TWO-WAY TRADE?

Teit Liithj e 사람과세계경영학회 2003 Global Business and Finance Review Vol.8 No.1

With a view toward thoroughly understanding the character of the foreign trade, it is necessary to make a well-defined delimitation between the concepts of intra- and inter-industry trade. The share of intra-industry trade is smaller b a bilateral estimation than by a multilateral estimation. Correspondingly, the share of intra-industry trade is smaller by a regional estimation in relation to a national estimation. Furthermore, there is not any reason to adjust the Grubel and Lloyd index for a trade imbalance. If foreign trade is related to that part of a product category which includes foreign trade in quality varieties between countries with identical factor endowments, the intra-industry trade becomes much more substantial. Therefore, intra-industry trade makes up a far smaller share of total foreign trade than normally assumed, and the Heckscher-Ohlin model is still the essential incentive in the explanation of foreign trade

VERTICAL SPECIALIZATION IN THE PRODUCTION ACROSS COUNTRIES

Teit Lilthje 사람과세계경영학회 2006 Global Business and Finance Review Vol.11 No.2

In this article we analyze the incentives for a vertical collaboration between producers in different countries. That is between producers in developed as well as in developing country. The purpose is to combine the two kinds of vertical specialization in one analytical framework. The new and quitecentral distinction from earlier contributions is that we take into account that in every link ofthe production process there is an exactly defined need ofan intermediate good according to a certain kind ofspecification

Recent Trends in European Trade

Teit Lü,thje 사람과세계경영학회 2011 Global Business and Finance Review Vol.16 No.2

This article investigates whether European integration has led to increased trade and specialization among the member countries of the European Union. We find an increasing trend in the internal trade among the EU15 countries and that trade with new member countries is also increasing. The export of most EU15 countries is nearly evenly distributed on goods. Furthermore, we characterise European trade to see the driving factors behind this trade. Foreign trade in varieties of different quality dominates the trade between European countries as a consequence of the rising standards of living generated by the European integration. This trade is relatively high among large economies and economies in close proximity to each other. Finally, we see that the increase in trade in varieties of different quality is relatively larger among poor countries than among rich countries.

VERTICAL SPECIALIZATION IN THE PRODUCTION ACROSS COUNTRIES

Teit Lü,thje People&Global Business Association 2006 Global Business and Finance Review Vol.11 No.2

In this article we analyze the incentives for a vertical collaboration between producers in different countries. That is between producers in developed as well as in developing country. The purpose is to combine the two kinds of vertical specialization in one analytical framework. The new and quitecentral distinction from earlier contributions is that we take into account that in every link of the production process there is an exactly defined need of an intermediate good according to a certain kind of specification

IS INTRA-INDUSTRY TRADE IN REALITY TWO-WAY TRADE?

Teit Lü,thje People&Global Business Association 2003 Global Business and Finance Review Vol.8 No.1

With a view toward thoroughly understanding the character of the foreign trade. if is necessary to make a well-defined delimitation between the concepts of intra- and inter-industry trade. The share of intra-industry trade is smaller by a bilateral estimation than by a multilateral estimation. Correspondingly. the share of intra-industry trade is smaller by a regional estimation in relation to a national estimation. Furthermore. there is not any reason to adjust the Grubel and Lloyd index for a trade imbalance. If foreign trade is related to that part of a product category which includes foreign trade in quality varieties between countries with identical factor endowments, the intra-industry trade becomes much more substantial. Therefore, intra-industry trade makes up a far smaller share of total foreign trade than normally assumed, and the Heckscher-Ohlin model is still the essential incentive in the explanation of foreign trade.

Bilateral Vertical Intra-Industry Trade in Manufactured Goods among the EU15 Countries in the Period from 1990 to 1998

Lars Jensen,Teit Lü,thje People&Global Business Association 2009 Global Business and Finance Review Vol.14 No.1

A common feature in the empirical literature of intra-industry trade is analysis of trade between a given reference country and a set of partners. This design does not permit generalization of empirical results to other reference countries and sets of partners, since the results may depend on characteristics of the studied reference country and set of partners. Accordingly, this article examines the bilateral trade among all trading partners within a set of partners. Such an analysis has not yet been conducted in the international literature. We conduct an econometric analysis of EU15 intra-industry trade with vertically differentiated products to investigate the effect of differences in factor endowments. This question has drawn great attention in recent international literature. Moreover, this paper examines the effect of economic size, income distribution overlap and geographical proximity.

COUNTRY SPECIFIC EFFECTS OF DIFFERENCES IN FACTOR ENDOWMENTS ON INTRA-INDUSTRY TRADE - ILLUSTRATED BY THE DANISH CASE

Lars Jensen,Teit Lüthje 사람과세계경영학회 2008 Global Business and Finance Review Vol.13 No.1

This article throws light on the subject whether there are country specific effects of differences in factor endowments on intra-industry trade. We conduct an econometric analysis of the Danish intra-industry trade in both horizontally and vertically differentiated products to examine whether determinants based on trade theory can explain this trade. Basically, we find a relationship between differences in factor endowment between trade partners on one side and the two types of intra-industry trade on the other. As regards horizontally intra-industry trade, the effect of differences in physical capital seems not to be country specific. As regards vertically intra-industry trade. the relationship is not simple and a country specific dependency of the effect of differences in endowment of technological capital is pointed out.

HORIZONTAL AND VERTICAL INTRA-INDUSTRY TRADE: IS THE EMPIRICAL CLASSIFICATION USABLE?

Jergen Ulff-Moller Nielsen,Teit Lilthje 사람과세계경영학회 2002 Global Business and Finance Review Vol.7 No.1

On the basis ofOECD trade statistics at SITC 5 digit levelfor the period 1961-1999 this paper shows the classification of international trade in (1) inter-industry trade; (2) horizontal intra-industry; and (3) vertical intra-industry trade used in the empirical trade litera!Ure to be unstable at the individual product level. This indicates that this type ofstatistical classification based on unit-values is probably not very useful. On the other hand, the paper also shows in accordance with the literature, that the aggregate distribution of trade into the three categories apparently is rather stable with vertical intra-industry trade (between Germany and France) making up 50-60%. The high level ofvertical intra-industry trade probably cover-up many products shifting between e.g verlical and horizontal intra-industry. The statement from the literature that the European inteJ{ration process involves heavy adjustment costs because of the size of vertical intra-industry trade is therefore rather dubious.

HORIZONTAL AND VERTICAL INTRA-INDUSTRY TRADE: IS THE EMPIRICAL CLASSIFICATION USABLE?

Jørgen Ulff Møller Nielsen,Teit Lü,thje People&Global Business Association 2002 Global Business and Finance Review Vol.7 No.1

On the basis of OECD trade statistics at SITC 5 digit level for the period 1961-1999 this paper shows the classification of international trade in (1) inter-industry trade; (2) horizontal intra-industry; and (3) vertical intra-industry trade used in the empirical trade literature to be unstable at the individual product level. This indicates that this type of statistical classification based on unit-values is probably not very useful. On the other hand, the paper also shows in accordance with the literature, that the aggregate distribution of trade into the three categories apparently is rather stable with vertical intra-industry trade (between Germany and France) making up 50-60%. The high level of vertical intra-industry trade probably cover-up many products shifting between e.g. vertical and horizontal intra-industry. The statement from the literature that the European integration process involves heavy adjustment costs because of the size of vertical intra-industry trade is therefore rather dubious.