Title: Factors influencing bilateral intra-industry trade in the auto industry: the case of South Africa

Authors: Maylene Y. Damoense-Azevedo; André C. Jordaan

Addresses: Department of Economics, School of Business and Economics, Monash University – South Africa Campus, Roodepoort 1725, South Africa ' Department of Economics, University of Pretoria, Pretoria 0001, South Africa

Abstract: This study investigates factors influencing bilateral intra-industry trade (IIT) between South Africa and main trading partners in the auto industry, crucial to managers and policy-makers within this industry. The econometric results of the gravity model of IIT are statistically and economically significant in the context of the fixed effects method of estimation. Thus, the econometric investigation reveals that IIT is positively influenced by difference in economic size, trade openness and foreign direct investment, while it is negatively affected by geographical distance, economies of scale and automotive assistance. The findings of this study propose advancing trade liberalisation and deregulation of the South African auto industry to enhance IIT levels.

Keywords: gravity models; automobile industry; South Africa; bilateral trade; trading partners; managers; policy makers; econometrics; econometric investigations; economic size; trade openness; foreign direct investment; FDI; geographical distance; economies of scale; automotive assistance; trade liberalisation; trade deregulation; economics; business research; intra-industry trade.

DOI: 10.1504/IJEBR.2012.044245

International Journal of Economics and Business Research, 2012 Vol.4 No.1/2, pp.63 - 82

Received: 08 May 2021
Accepted: 12 May 2021

Published online: 14 Dec 2011 *

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