The Structural Model Of Intra-industry Trade, Corresponding To The Classification System And Product Differences Defined Research

One of the features of modern international trade is the continual expansion of intra-industry trade consisting mainly of industrial products. The expansion has been not only been seen in terms of quantity and variety, but also in terms of geographic scope, country objects, manufacturing procedures, and product structures. For many years, academic studies on intra-industry trade have been focusing on identification and explanation, two basic aspects as well as key points of the study.Because of the difficulties in identification and differentiating the concepts of industry and product, there are still not adequate fundamental researches and unified, widely accepted methods and tools for research. Therefore, we have seen analysis with various results and even explanations in which theoretical hypothesis are in contradiction with empirical evidence.Hence, while making identification more precise, we have to introduce a new subject, which is to make it feasible to standardize the concepts of industry and product in empirical analysis, according to different industry classification systems. The subject is necessary and worthwhile for the valid estimation of model parameters and reasonable explanation of intra-industry factors. The correspondence of industry classification systems is a tentative research towards a primary research area from new perspectives.The significance of this paper lies in the fact that it could provide researchers with new methodologies and tools to satisfy the practical needs for standardization, validity, convenience, and multi-dimensional data processing.The main work and results of this paper can be summarized as the following:1. Regarding the research on the development of intra-industry trade. This paper briefly combed the main theories and analyzed the current trade development situation, elaborated on the significance of the development of intra-industry trade in contributing to the adjustment of trade and industrial structures. 2. Regarding the research on classification of intra-industry trade structures. This paper suggested the idea of second classification from the perspective of statistical grouping, and tried to study the identification of intra-industry trade, classification of structure and mode identification. If we divide the total products into two categories, inter-industry trade and intra-industry respectively, and define this classification as first classification, then within the domain of intra-industry trade, from different perspectives such as manufacturing procedures, intensity of input factors, vertical and horizontal specialization and trade, we can do re-classification and mode identification, according to certain standards and econometrical methods. This procedure is defined as second classification, i.e. the basic idea of classification of intra-industry trade structures. This paper suggested ideas and methods for identifying categories according to quality and quantity.The objective of classification is to break the study of trade structure into pieces, which is good for a multi-perspective analysis on modern economy.3. Regarding the research on the correspondence of industry classification systems. This paper performed a comparative analysis on the classification of industries in terms of economic theory and statistics. Based on this, we constructed correspondence between classification systems by utilizing the existing international standard statistical classification and national standard statistical classification. Meanwhile, based on SITC.Rev3 and HS2002 classification, we have compiled correspondence tables upon finishing the classification of product categories according to their properties. The basic functions of these tables include using computer software to achieve conversion between trade data categories and corresponding codes, data processing works such as statistical grouping, inquiring, computing and generating tables on research levels.The objective of compiling these tables are:1). unify statistical standards.2). facilitate scientific research.4. Regarding the research on the indifference curve of production difference. Product difference, the premise of intra-industry trade, is one of the important explanatory variables. However, existing researches are limited within conceptual explanations, lacking quantitative measurements. This paper studied the theoretical hypothesis and measurement of product difference, and did empirical test on the theoretical models. We think that product difference is determined by both homogeneity of production inputs and consumption utility alternatives. Through comparison among product variants, we suggested models and measuring formulas in which the extent of product differentiation is determined by indifference curves. We also did correlation analysis and regression analysis on product difference and intra-industry trade index, with trade data between China and Japan. The test results showed that the intra-industry trade index, i.e. IIT, is positively related to difference D, and negatively related to homogeneity H, alternative A, which is consistent with theoretical hypothesis of the indifference curve of product difference.