The aim of this article is to analyse the role played by bilateral differences in technological level and capital per worker endowments in order to explain the pattern of vertical intra-industry trade. To that end, we focus on the case of trade between Spain and the OECD countries. We use different procedures to determine the way in wich both sources of comparative advantage interact. We further take into account the effect of other variables from the demand side of the economy, as well as several industry indicators.

Key words: intra-industry trade, technology, factor endowments, vertical differentiation.
JEL classification: F12, F14.