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has been cited by the following article:

• TITLE: Economic Development, Vertical Intra-Industry Trade and Gains from Trade

  AUTHORS: Le Duc Niem, Taegi Kim

  KEYWORDS: Product Quality; Volume of Trade; Intra-Industry Trade; Economic Development; Gains from Trade

  JOURNAL NAME: Modern Economy, Vol.5 No.1, January 6, 2014

  ABSTRACT: This paper investigates the impact of economic development on international trade and sources of gains from trade based on a theoretical model that considers consumers’ preference diversity for quality and economies of scale in production. We confirm that both the volume of trade and the share of intra-industry trade increase with increases in the level of economic development in the region. We also find that the intra-industry trade share increases as the technology levels of the two countries become similar. Additionally, we find that both countries can gain from trade and that those gains come from three sources: internal economies of scale, more consumption, and more variety of goods.