VOLUME IV
WINTER 1996

ECONOMIC INTEGRATION, INTRA-INDUSTRY TRADE AND ADJUSTMENT COSTS
 
ESTHER GORDO
Servicio de Estudios del Banco de Espaņa
CARMELA MARTÍN
Universidad Complutense de Madrid
 
This work empirically examines the adjustment in trade of Spanish manufactured goods to the conditions created by the integration and unification of the European market. In this respect we conclude that intra-industry trade has prevailed, mainly based upon qualitative or vertical product differentiation strategies, with a specialization on the part of Spanish exports in inferior quality products as compared to those imported from other E.U. member states. Nevertheless, the results show how over a period of time the quality standards of Spanish manufactured exports have been drawing closer to those of imported goods, even if this has not avoided the existence of a relative specialization in inferior quality products.
 
Keywords: European economic integration, intra-industry trade, product differentiation.

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