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This article tries to analyze the extent of product differentiation in the Tunisian's context, by relying on an investigation derived at a sufficiently disaggregated level of sectors. In the first section, we tend to expose the relationship between market structure, product differentiation and intra-industrial trade. Then, we reexamine in the second section some operational proxies of products variety that were previously analyzed by the empirical literature. In the third section, we tend to appreciate the strength of products differentiation in the specific case of Tunisia and in 8 different sectors. Market structure, product differentiation and intra-industrial trade: In order to apprehend the concept relating to the product differentiation we will analyze in what follows the contributions of the endogenous theory of growth based on the innovation as well as the new theories of international trade. Market structure and innovation: Throughout the economic literature, link between industrial market structure and investments in R&D or innovations has powerfully attracted attention. In fact, an important part of economic studies has extremely discussed the impact of competition's intensity on the incentives of innovative efforts. In his predecessor initiative, Schumpeter (1942) was an original partisan of the monopole's alternative. At this level, Schumpeter postulates that an important part of market, promoted by the predominance of monopolistic competition, represents a decisive factor to encourage firms to innovate. Those advantages reflected by a greater part of market, allow to share fixed costs of R&D among a greater number of products variety, enhance the funding to a favorite markets, achieve an important economies of scale and finally permit to firms that has a most important size and most diversified to explorer the new discoveries. In this context, competition in one market leads to competition in a different market with the emergence of a new cheaper product that incorporates a more important fixed costs and insignificant marginal costs. In others words, imperfect competition leads to important market parts under the presence of huge entry barriers explicated in turn by inability to pursue the speed of innovations. In this later case, market's parts depend on intellectual proprieties. In according to Schumpeterian dynamics, the attempts of learning are originated from large firms that are more able to innovate and improve their productivity. This is plausibly explicated by the economies of scale, the availability of internal resources in the case of imperfect markets and /or uncertainty, and synergies between the technological, productive, marketing and distribution's activities. More recently, Link (1981) has explored these arguments and has showed that the rate of return of R&D is positively associated with the market's size. In the same line of literature, Cohen and Klepper (1996) supported the argument according to that, as large firms produce a greater output, they are more able to apply the results of R&D to more range of products and process and so to share their costs. However, a contradictory theoretical developments has been elaborated by Griliches (1980) and Wang and Tsai (2003) indicating the absence of any effective association between the R&D and the size of firms, that allow in turn to reject the Schumpeterian hypothesis. Beside, Arrow (1962) established a reversed supposition by putting forward the advantages of competitive structure revealed by the inability to appropriate the incomes associated with the efforts of innovation, and therefore the feebleness of the monopolistic structure. It is just through more recent empirical studies that link between the size of market and the innovation has been examined for the differentiated products.

Product Differentiation and Intra-Industrial Trade: Quantitative Assessment in the Case of Tunisia