Title: Vertical intra-industry trade in higher and lower quality: a new approach of measuring country-specific determinants

Authors: Rosanna Pittiglio; Filippo Reganati

Addresses: Seconda Università di Napoli – S.U.N., Corso Gran Priorato di Malta, 81043 Capua, CE, Italy ' Dipartimento di Comunicazione e Ricerca Sociale, Università di Roma ‘La Sapienza’, Via Salaria 113, 00100 Rome, Italy

Abstract: This paper aims to contribute empirically to the knowledge concerning the nature and causes of Italian vertical intra-industry trade (VIIT), distinguishing between high- and low-quality VIIT. The value-added of this study arises from the fact that it utilises a new approach to measure country-specific determinants, with the advantage that it eliminates the effects linked to the hypothesis of homogeneity between sectors within the same country. Therefore, differently from past studies on intra-industry trade, in this paper the characteristics of a particular country are measured by referring to information not only at aggregated level, but also at industry level. Our findings reveal that the determinants are not only same for the three dependent variables, but also depend on the technological intensity of goods. This confirms the particular nature of the Italian specialisation model, which is very different from that in other industrialised countries that tend to be located, at the higher end of the price-quality spectrum.

Keywords: vertical trade; product quality; product differentiation; higher quality trade; lower quality trade; country-specific determinants; determinant measurement; Italy; homogeneity; industrial sectors; dependent variables; technological intensity; industrialised countries; price-quality spectrum; economics; business research; intra-industry trade.

DOI: 10.1504/IJEBR.2012.044244

International Journal of Economics and Business Research, 2012 Vol.4 No.1/2, pp.44 - 62

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 14 Dec 2011 *

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