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Intra-industry Trade: Importing and Exporting Behavior

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Intra-industry trade involves countries exporting and importing the same or very similar goods. Why would countries export and import the same or similar products?

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Solution Summary

We examine intra-industry trade involving countries exporting and importing the same or very similar goods. We explain why countries export and import the same or similar products.

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There are several reasons countries might export and import the same or similar products. One important point is that slight differences between products can create the variety that consumers are looking for. Take for instance, the automobile industry. Even though America has three major automobile manufacturers that can ...

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