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Fragmentation, Vertical Intra-Industry Trade, And Automobile Components, Nuno Carlos Leitão
Fragmentation, Vertical Intra-Industry Trade, And Automobile Components, Nuno Carlos Leitão
Nuno Carlos Leitão
By analyzing vertical intra-industry trade (VIIT) within Portugal's automobile parts and components industry, this study adds new empirical evidence for the international fragmentation of the production process. For trade partner countries, we choose the EU countries, the BRICs, and the US during the period 1995 to 2005. From panel data analysis, the empirical evidence supports the notion that shorter geographical distance, dissimilar income levels, and dissimilar endowments between two economies lead to a higher VIIT of automobile components. In addition, our results also confirm the hypothesis that automobile (assembly) production in each country promotes higher VIIT of auto parts, while …