THE DETERMİNANTS OF VERTİCAL AND HORİZONTAL INTRA-INDUSTRY TRADE IN TURKEY

Pınar Narin EMİRHAN (Dokuz Eylül University)

Intra-industry trade, which is defined as the simultaneous import and export of goods within the same industry, gained considerable importance after 1980's in world trade. However, there is too few literature on this subject which relates to Turkey. The purpose of this paper is to fulfill this shortcoming.

In this study, the determinants of vertical and horizontal intra-industry trade (IIT) are tested empirically by using various country-specific and industry-specific hypothesis. IIT levels are calculated by using Unadjusted Grubel-Lloyd Index (1975) and export and import unit values per ton are used to divide IIT into horizontal and vertical components. In the calculations, trade data organized at the two and three digit Standard International Trade Classification (SITC) (Rev. 3) are used and estimations are done by using logit transformation procedure. The preliminary findings of this study show that European Union countries have the highest IIT levels for both vertical and horizontal IIT and transportation costs are very influential on IIT levels.