Authors:
Rajneesh Kler, Sanober Khan, Arvind Kumar Singh, Shobhit Goel
Addresses:
Department of Management and Social Sciences, Amity University Tashkent, Tashkent, Uzbekistan, klerrajneesh@gmail.com. Department of Management and Social Sciences, Amity University Tashkent, Tashkent, Uzbekistan, prof.sanober2020@gmail.com, drshobhitgoel@gmail.com. Department of Economics, Amity Law School, Amity University Lucknow, Lucknow, Uttar Pradesh, India, aksingh12@lko.amity.edu.
Abstract:
The study examines the interrelation between a country's comparative advantage and the intra-industry trade accelerated by economies of scale, in the case of Uzbekistan. The paper first estimates the degree of comparative advantage and intra-industry trade by calculating the Revealed Comparative Advantage (RCA) index and the Intra Industry Trade (IIT) index in the prominent product categories for Uzbekistan. As suggested theoretically by the monopolistic competition model for new trade theory and factor endowment model, a system of simultaneous equation model is developed to examine the impact of comparative advantage on the intra-industry trade. Econometrically, 2SLS and SUR regression models are used to estimate the equations. The study concludes that the comparative advantage has a positive volume effect on the intra-industry trade. The depreciating Uzbek currency against the US dollar positively affects the degree of intra industry trade and many product categories. In contrast, there is a set of products where trade is solely based on comparative advantage or intra-industry trade. To boost trade performance, the economy must focus on products with a relatively higher degree of intra-industry trade and a stronger comparative advantage.
Keywords: Comparative Advantage; Intra Industry Trade; New Trade Theory; RCA Index; G-L IIT index; 2SLS Regression; SUR Regression; Technology Transfer; Economy Development.
Received: 05/01/2024, Revised: 29/02/2024, Accepted: 09/04/2024, Published: 05/06/2024
AVE Trends in Intelligent Technoprise Letters, 2024 Vol. 1 No. 2 , Pages: 82-90