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NUMERO 20 - 29/10/2014

 An analysis of Intra Industry trade in Environmental goods: A case study of BRICS countries

The growing importance of intra-industry trade (the simultaneous exports and imports in the similar industry) over the last two decades is well recognized in the literature. Also, with increasing environmental concerns, environmental goods industry in developing nations witnessed a sharp increase in its growth and as BRICS countries-Brazil, Russia, India, China and South Africa, are the most rapidly developing nations, the study focuses on Intra industry trade in environmental goods for India with the rest of the BRICS member countries. The present study tries to analyse the composition/structure of trade in Environmental Goods for India with rest of the BRICS members and India with the ROW. Then to disentangle the Intra-Industry Trade into Vertical and horizontally differentiated products. Furthermore, analyzes the country specific determinants of IIT and VIIT. Our preliminary analysis showed that the share of India BRCS trade in India’s trade with rest of the world is increasing. Based on the GL index, the trade between India and rest of the BRICS countries is majorly in the form of inter industry trade, with high level of Vertical intra industry trade. The regression results signify that determinants of intra industry trade are difference in GDP per capita and factor endowment ratio. While VIIT depends on difference in GDP per capita, Difference in GDP, Average GDP, distance between the countries and factor endowment ratio... (segue)

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