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Intra-Industry Trade in Agricultural Products: The Case of China

By Wang Jing, Nuno Carlos Leitão and Horácio C. Faustino

Abstract

This paper studies the extent and determinants of intra-industry trade (IIT) in agricultural products of China for the period 1997-2006. The IIT index shows that the level of IIT in agricultural products between China and its thirteen main trading partners is not high. Using a panel data analysis, the empirical results of determinants of IIT indicate that differences in per-capita income and geographical distance have a negative effect on Chinese IIT in agricultural products. Free trade agreements between China and some trading partners weaken the negative effect of per-capita income differences on IIT. The results also suggest that cultural similarity between China and some countries has a positive influence on this type of trade.agricultural products; intra-industry trade; China.

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