VIITVertical Intra Industry Trade
VIITVishwakarma Institute of Technology (Pune, India)
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Recall that the prediction is that HUT and VIIT should receive a greater preference margin, but be less likely to be excluded from preferential liberalization.
The tariff preferences obtained for VIIT would then be approximately one-fifth greater and for HUT about one-third greater than in the inter-industry case.
Now consider the effect of VIIT and HIIT on the likelihood that a good is excluded from liberalization by Japan or South Korea.
Table 1 Expected Coefficient Signs Independent Variable Expected Sign Dependent variable: PreferenceMargin VIIT or lnVIITvalue + HIIT or InHIITvalue + ImportCompetition - InExports - InBilateralFDIFlows + Dependent variable: Excluded VIIT or lnVIITvalue - HIIT or InHIITvalue - ImportCompetition + InExports + Table 2 Regression Results PreferenceMargin Independent Variable (1) (2) HIIT 2.
In the first study, we shall discuss the effect changing tariff level on IIT and try to find out that is there any correlation between them, and in the second study we shall discuss the pattern of IIT, HIIT and VIIT with different product groups.
VIIT is further categorized in high quality (HQVIIT) and low quality (LQVIIT) for which we have used equation 6.
From figure 5 it is clear that, at 4-digit level, VIIT dominates HIIT but the interesting thing is that, over the period HIIT have increased from 9.
Here also VIIT dominates over HIIT, as well as, contribution of LQVIIT is more than HQVIIT.
VIIT is thus defined as a two-way trade of an item where the per kilogram UV of exports (measured f.
This calls for some caution when interpreting the results for VIIT and HIIT, because it is known that at a very disaggregated level, relative prices would reflect relative qualities more accurately.
Russia's VIIT and HIIT indices have been identified by UVs.
The empirical results confirm both new trade theory, which predicts an increasing level of IIT as a consequence of the liberalisation process, and the new strand of trade theory, which, by distinguishing between HIIT and VIIT, suggests how inter- and intra-industry trade coexist.