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dc.contributor.authorThorpe, Michael
dc.contributor.authorLeitao, N.
dc.identifier.citationThorpe, Michael and Leitao, Nuno. 2011. Marginal intra-industry trade and adjustment costs: The Australian experience, Centre for Research in Applied Economics working paper series: no. 201102, Curtin University of Technology, School of Economics and Finance.

The objective of this research is to investigate labour market adjustment associated with changes in Australia's trade pattern over the period 1992-2000. Specifically the focus is on the so-called smooth adjustment hypothesis (SAH) which posits that, compared with inter-industry trade, intra-industry trade (IIT) expansion is associated with relatively lower factor adjustment costs. A dynamic panel data approach (GMM-System) is employed. We find that there is a negative correlation between changes in employment and increased IIT. This result provides support for the SAH. Given the rise in IIT as a proportion of Australia's overall trade during the period under review, the adjustment in labour markets stemming from trade liberalisation at that time is likely to have been less than otherwise expected.

dc.publisherCentre for Research in Applied Economics
dc.subjectMarginal intra-industry trade
dc.subjectdynamic panel data
dc.subjectlabour market adjustment
dc.titleMarginal intra-industry trade and adjustment costs: The Australian experience
dc.typeWorking Paper
dcterms.source.seriesCentre for Research in Applied Economics working paper series
curtin.departmentSchool of Economics and Finance
curtin.accessStatusOpen access

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