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Intra‐industry Trade, Reconsidered: The Role of Technology Transfer and Foreign Direct Investment
Author(s) -
Okubo Toshihiro
Publication year - 2007
Publication title -
world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/j.1467-9701.2007.01073.x
Subject(s) - foreign direct investment , factor endowment , endowment , technology transfer , economics , international economics , international trade , similarity (geometry) , intra industry trade , trade barrier , comparative advantage , macroeconomics , political science , artificial intelligence , computer science , law , image (mathematics)
This paper investigates novel determinants of intra‐industry trade (IIT) of late 1990s Japanese trade. Our empirical analysis shows that IIT is increased not only by the similarity of GDP and factor endowment but also by technology transfer via Japanese FDI. In particular, the current high proportion of Japanese IIT with Asian countries can be explained by technology transfer (licensing between headquarters and overseas affiliates) via FDI.