VERTICAL INTRA-INDUSTRY TRADE: PATTERNS AND DETERMINANTS IN THE ITALIAN CASE

Using a cross-country analysis, this paper examines the determinants of the Italian intra-industry trade in vertically differentiated products. By considering the degree of specialization by quality within industries, we found that Italys IIT in low-quality products is higher the lower the factor endowment difference and the higher the technological gap with the partner country. These findings confirm the peculiarity of the Italian specialization model which is strongly different from that of other main industrialized countries which are located mainly at the higher end of the price-quality spectrum