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RESEARCH PRODUCT

The Role of Intraindustry Trade in Interregional Trade in the Midwest of the US

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The subject of international trade among countries has long been of concern to policy makers and academics alike. As economic activity has become more and more international in scope, the potential impact of international trade on regional economic growth and income distribution has become central to many studies. Within economics, the study of industrial organization, particularly with respect to imperfect competition and economies of scale and agglomeration, has influenced developments in international trade theory in the past few decades. In identifying the determinants of trade among countries, issues such as market size, relative level of Gross National Product (GNP) per capita, market structure, etc., have all become important, as well as the more traditional determinants of trade, e.g., relative capital and labor endowments. Furthermore, there has been an increasing realization of the role and influence of location in explaining trade and trade patterns (see Krugman, 1990; Fujita et al., 1999; Hanson, 1996; Martin, 1999, Venables et al., 2003)