Intra-Industry Trade in Manufactures Between Thailand and Other Asia Pacific Economic Cooperation (APEC), Countries

This paper empirically investigates the determinants of intra-industry trade in manufactures between Thailand and other APEC countries. A 3-digit Standard International Trade Classification (SITC) data for the period 1980-1999 is employed in the analyses. Tests of various hypotheses of the determinants of intra-industry trade are developed and performed. Results indicate that, in the pre-APEC era, intra-industry trade was negatively associated with disparity in economic development and transport and information costs between trading partners, but positively related with similarity in sophistication of the economies, capital intensity, culture and the level of openness of the economy. In the post APEC era, intra-industry trade increased with economic size, but the effect was weaker. Disparities in economic development become less important in influencing Thailand’s intra-industry trade in manufactures. By adjusting for trade imbalance, the results reveal that Thailand’s entry into APEC has stimulated growth in intra-industry trade in manufactures.