The principal purpose of this study is to provide a refined empirical investigation concerning
country-specific determinants of horizontal and vertical intra-industry trade (IIT,) in relation to
South Africa using the gravity model of trade in a panel data setting. Prior to investigating the
case of South Africa's intra-industry trade a critical review of the relevant theoretical,
methodologcal, and empirical literature is provided. The study operationalises the theoretical
dstinction between horizontal and vertical IIT using the latest methodology of decomposing total
IIT into horizontal intra-industry trade (HIIq and vertical intra-industry trade (WIT,).
Thts study makes several advances on earlier empirical studies of intra-industry trade
determinants. These include the introduction of new countq-specific determinants of intraindustry
trade that previous studies have not examined. Furthermore, it is the first empirical study
that traces the relationshp between intra-industry trade flows and intellectual property rights
(IPRs). Moreover, to ensure the sensitivity and robustness of the results, several econometric
approaches have been used in estimating the gravity model of South Africa's intra-industry trade:
the consistent coefficient approach, the fixed effects approach, the random effects approach, and
the between effects approach.
The econometric results are generally satisfactory in terms of economic interpretation and
statistical significance and thus offer new empirical validation to the theoretical explanatory
variables. The key findngs suggest the following: the volume of South Africa's IIT has increased
during the study period and its WIT exceeds its HIIT. The latter result reflects the nature of
South Africa's trade as it imports high valued added products and exports primary and mineral
products. South Africa's intra-industry trade and its two components are positively related to
market size and standard of living, and negatively related to geographcal distance. Furthermore,
separately, the IPRs and the imitation ability of South Africa's tradmg partners are not important
factors in determining IIT flows; however, the interaction between them is an important factor.
Thts study also reveals South Africa should pursue its intra-industry trade with rest of world
concentrating on local industries that produce most competitive varieties, absorbing labor and
other resources from the production of other varieties.
| Identifer | oai:union.ndltd.org:ADTP/218737 |
| Date | January 2006 |
| Creators | Al-Mawali, Nasser, n/a |
| Publisher | University of Canberra. Business & Government |
| Source Sets | Australiasian Digital Theses Program |
| Language | English |
| Detected Language | English |
| Rights | ), Copyright Nasser Al-Mawali |
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