Answer to Question #73988 in Microeconomics for Gongala

Question

To prove the intra industry trade theory empirically which assumption has been altered as compared to the HOS model.

Answer 1

HOS emphasizes that countries will involve in exporting those products for the production of which their profuse resources are going to be used. On the other hand, intra – trade involves same industry products traded between countries (Markusen et al, 2000).