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 ME  Vol.1 No.3 , November 2010
Technology, Preference for Quality, and Vertical Intra-Industry Trade
Abstract: This paper provides a simple theoretical model to investigate determinants of the vertical IIT based on Bertrand price competition. We find that the volume of trade is higher among countries where R&D investments are larger. In addition, the vertical IIT share increases with the similarity between two countries in terms of technology and per-capita income. Our theoretical findings are consistent with recent empirical findings.
Cite this paper: nullL. Niem and T. Kim, "Technology, Preference for Quality, and Vertical Intra-Industry Trade," Modern Economy, Vol. 1 No. 3, 2010, pp. 129-133. doi: 10.4236/me.2010.13014.
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