Question

Is intra-industry trade (IIT) driven mostly by comparative advantage?

Is intra-industry trade (IIT) driven mostly by comparative advantage?

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Answer #1

The intra industry trade popularly known as IIT is also based on the comparative advand this is because of the fact that and this is because of the fact that intra industry trade involve the import and export of goods within the same industry but the goods are actually differentiated in terms of features. If one firm has a comparative cost advantage in manufacturing that feature while other form in other country has a comparative cost advantage of produce some other feature, then they both get to involve in trade.

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