Another Empirical Look at the Theory of Overlapping Demands - Un Altro Sguardo Empirico alla Teoria delle Overlapping Demands
International trade--East Asia
Linder’s theory of overlapping demands suggests that international trade in manufactured goods will be stronger between countries with similar per capita income levels. In this paper, we test the Linder hypothesis for five East Asian countries using panel data for five years. In addition to including bilateral trade data for these countries, we include their bilateral trade data with their other major trading partners. A modified gravity model is developed for this purpose. The model is first estimated for each year in the sample. In addition, a panel data set is constructed and estimated using a fixed-effects estimator. The overall results of our estimations are quite robust and do not provide support for Linder’s hypothesis.
Dhakal, Dharmendra; Pradhan, Gyan; and Upadhyaya, Kamal, "Another Empirical Look at the Theory of Overlapping Demands - Un Altro Sguardo Empirico alla Teoria delle Overlapping Demands" (2011). Economics Faculty Publications. 16.
Dhakal, Dharmendra & Pradhan, Gyan & Upadhyaya, Kamal P., 2011. "Another Empirical Look at the Theory of Overlapping Demands - Un altro sguardo empirico alla teoria delle overlapping demands," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 64(1), pages 103-113.