| Since World War II, the traditional international trade theory has been unable to explain the new trade pattern, some countries import and export the same kind of goods at the same time, the study on intra-industry trade(IIT) has been emerging.With the development of social productivity, services and trade in services play an increasingly important role in the economic. China’s insurance market has been fully open to the world. America is the largest insurance market in the world. The study on IIT in insurance services between China and America can promote the development of insurance industry in China and in the world.Firstly, the paper introduces the backgrounds, structure, innovation and shortcomings of this study, clarifies some basic concepts of the IIT and summarizes 6 indicators to measure the level of the IIT and then explains the factors that drive the IIT. These have provided the theorecitcal foundations for the study. The factors can be divided in two levels, one is the national level, the other is industry level, the national levels including the difference of per capita income, the openness of the market and the size of the market, the industry level including scale economy, product differentitation, market structure and forign direct investment. Paritculary, as the present IIT study maily focuses on the maufacuture industry, the paper adds the factor of goods trade to analyze the impact on the IIT in insurance services between China and America.In the use of the fixed effect model, the paper measures and analyzes the magnitude of IIT in insurance services from 1995-2004. These empirical findings are:the openness of the market and foreign direct investment can contribute to the IIT, the difference of per capita income and goods trade show no clear correlation with the IIT. According to the theory and empirical results, from the national level and company level, put forward some suggestions about how to promote the development of insurance industry in China. |
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