scholarly journals Intra-industry trade in the Visegrad countries: Does the linder hypothesis hold?

2016 ◽  
Vol 66 (2) ◽  
pp. 283-306 ◽  
Author(s):  
Martin Grančay ◽  
Nóra Grančay ◽  
Jolita Vveinhardt
Keyword(s):  
Gravity Model ◽  
Capita Income ◽  
Intraindustry Trade ◽  
Per Capita Income ◽  
Trade Theory ◽  
Income Levels ◽  
Factor Endowments ◽  
Per Capita ◽  
Linder Hypothesis ◽  
Visegrád Countries

In 1961, Staffan Linder attacked mainstream trade economics by diverging from the generally accepted factor endowments theory and focusing on alternative explanations of why countries trade with each other. He was among the first economists to recognise the growing importance of intraindustry trade and presented his hypothesis that the more similar the per capita income levels of countries, the more they tend to trade with each other. This observation has since become one of the main pillars of modern trade theory. The present paper assesses the empirical validity of the Linder hypothesis in the Visegrad countries. Using a variant of the gravity model, it finds that when controlling for other factors, the Visegrad countries tend to trade more with countries with similar per capita income levels than with significantly richer or poorer countries. This observation is consistent with the Linder hypothesis. OLS regressions, Tobit regressions, and robustness checks all support the hypothesis.

scholarly journals The Mechanics of Regime Instability in Latin America

2009 ◽  
Vol 1 (1) ◽  
pp. 5-36 ◽  
Author(s):  
Adam Przeworski
Keyword(s):  
Latin America ◽  
Capita Income ◽  
Lower Income ◽  
Per Capita Income ◽  
Income Levels ◽  
Per Capita ◽  
Past Experiences

The paper is narrowly addressed to a single puzzle: How did it happen that countries that attempted to install democracy earlier enjoyed it less frequently? Regime dynamics are driven by two mechanisms: (1) Democracies become more durable as per capita income increases, and (2) Past experiences with democracy destabilize both democracies and autocracies. As a result, countries that experiment with democracy at lower income levels experience more regime instability. Moreover, until they reach some income threshold, at any time such countries are less likely to be democratic than countries that first enter democracy when they have higher incomes. Hence, paradoxically, the resistance of European monarchies against democracy resulted in democracies that were more stable than those following post-independence attempts in Latin America.

scholarly journals Analysing the Effects of Cultural Differences to International Trade in Manufactured Goods: A Literature Survey

2014 ◽  
Author(s):  
Tuğçe Uğur ◽  
Mehmet Sedat Uğur
Keyword(s):  
International Trade ◽  
Cultural Differences ◽  
Capita Income ◽  
Literature Survey ◽  
Cultural Dimension ◽  
Per Capita Income ◽  
Capital Income ◽  
Income Levels ◽  
Per Capita ◽  
Manufactured Goods

Linder Theory which is a considerable theory about international manufactured goods trade suggests that international trade in manufactured goods will be more intense between countries with similar per capita income levels than between countries with dissimilar per capita income levels. But in practice, cultural differences between countries may also restrain the density of trade. This literature survey will aim to explain the relationship between income level and culture which may be different for one to another group. G. Hofstede who is an influential cultural anthropologist suggests five different cultural dimension to explain cultural differences between countries. Later, Hofstede calculates the values of different countries in these dimensions. So, in this study, initially, international trade in manufactured goods between similar per capital income levels will be examined. This will be done by comparing per capital income levels of selected countries. OECD data in trade and TÜİK's data (for Turkey) will be used in comparison. Later Hofstede's data will be used. In conclusion, the survey will try to explain how large are the effects of cultural differences between countries with similar income levels in international trade in manufactured goods. Previous studies generally find statistically significant results, but the main framework of these studies suggests controversial results. The study has aimed to commit a literature survey and in this study, comparisons of trade flow between countries are also controversial.

scholarly journals Growing U.S. Trade Deficit in Consumer-Oriented Agricultural Products

2008 ◽  
Vol 40 (3) ◽  
pp. 953-965
Author(s):  
Renan Zhuang ◽  
Won W. Koo ◽  
Jeremy Mattson
Keyword(s):  
Capita Income ◽  
Trade Balance ◽  
Trade Deficit ◽  
Trade Agreement ◽  
The United States ◽  
Agricultural Products ◽  
Per Capita Income ◽  
Trade Theory ◽  
Per Capita ◽  
The U.S

We investigate the factors behind the growing U.S. trade deficit in consumer-oriented agricultural products by using reliable panel data and an empirical trade model derived from international trade theory. The results indicate that per capita income in the United States appears to be the most important determinant for the growing U.S. trade deficit of consumer-oriented agricultural products. An increase in per capita income and trade liberalization in foreign countries would improve the U.S. trade balance. U.S. foreign direct investment abroad in food manufactures and the North American Free Trade Agreement (NAFTA) are found to have negative effects on the U.S. trade balance.

scholarly journals Testing the Validity of Linder Hypothesis Using Gravity Model: The Case of Turkey and Selected Transition Economies

2019 ◽  
Author(s):  
Harun Bal ◽  
Müge Manga ◽  
Esma Erdoğan
Keyword(s):  
Foreign Trade ◽  
Capita Income ◽  
Transition Countries ◽  
Trade Flows ◽  
Gravity Models ◽  
Per Capita Income ◽  
Turkish Economy ◽  
Per Capita ◽  
Linder Hypothesis ◽  
Import Intensity

In this study, the validity of the Linder Hypothesis has been tested based on export and import intensity of foreign trade flows between Turkish economy and selected Transition Countries. According to this hypothesis, the more similar the demand structures and per capita income levels of countries, the more they will trade with one another. The hypothesis uses the difference between the per capita income of countries engaged in foreign trade as the main parameter and indicates that a fall in income difference between two countries increases the validity of the Linder hypothesis by increasing the intensity of foreign trade of the countries. The study considers selected Transition Countries having rising share of foreign trade with Turkey during the period 2001-2017 to examine the validity of Linder Hypothesis in the context of foreign trade flows employing Gravity Models that shows "Aggregate Linder Demand Effect" and panel data analysis. Test results does not support Linder hypothesis in terms of export and import intensity of foreign trade flows between Turkish economy and selected Transition Countries during 2001-2017, rather factor endowment does matter for inter-industry foreign trade.

scholarly journals Corruption, growth, and the environment: a cross-country analysis

2004 ◽  
Vol 9 (5) ◽  
pp. 663-693 ◽  
Author(s):  
HEINZ WELSCH
Keyword(s):  
Direct Effect ◽  
Low Income ◽  
Indirect Effect ◽  
Capita Income ◽  
A Priori ◽  
Per Capita Income ◽  
Income Levels ◽  
Section Data ◽  
Per Capita ◽  
Positive Direct

The relationship between per capita income and a number of pollution indicators has been found to display an inverted U-shaped or downward-sloping pattern. Corruption may affect this relationship in two distinct ways: by raising pollution at given income levels (direct effect) and by reducing per capita income (indirect effect). The total effect is ambiguous a priori. Using cross-section data for several indicators of pollution, the paper estimates the direct and the indirect effect of corruption on pollution. The indirect effect via income is positive or negative depending on the income level. If negative, the indirect effect is dominated by the positive direct effect. Overall, our measures of pollution are monotonically increasing in corruption. Because this relationship is particularly strong at low income levels, developing countries can considerably improve both their economic and environmental performance by reducing corruption.

A spatial analysis of incomes and institutional quality: evidence from US metropolitan areas

2015 ◽  
Vol 12 (1) ◽  
pp. 191-216 ◽  
Author(s):  
JAMIE BOLOGNA ◽  
ANDREW T. YOUNG ◽  
DONALD J. LACOMBE
Keyword(s):  
Metropolitan Area ◽  
Capita Income ◽  
Economic Freedom ◽  
Metropolitan Areas ◽  
Institutional Quality ◽  
Income Growth ◽  
Per Capita Income ◽  
Income Levels ◽  
Per Capita ◽  
Capita Income Growth

AbstractWe use the Stansel (2013) metropolitan area economic freedom index and 25 conditioning variables to analyze the spatial relationships between institutional quality and economic outcomes across 381 U.S. metropolitan areas. Specifically, we allow for spatial dependence in both the dependent and independent variables and estimate how economic freedom impacts both per capita income growth and per capita income levels. We find that economic freedom and per capita income growth and income levels are directly and positively related. Furthermore, we find that the total (direct plus indirect) effects on all metropolitan areas are positive and larger in magnitude than the direct effects alone, indicating that freedom-enhancing reforms in one metropolitan area lead to positive-sum games with neighboring metropolitan areas.

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