INTRA‐INDUSTRY TRADE AND ECONOMIC DEVELOPMENT: EMPIRICAL EVIDENCE OF THE NEWLY INDEPENDENT STATES OF THE FORMER SOVIET UNION

This article discusses the intra‐industry trade (IIT) aspect of international trade. The authors focus primarily on the trade between the United States and the 15 newly independent states of the former Soviet Union. Using data for these countries and the United States, this paper estimate the share of IIT of the 15 newly independent countries. The Pearson Product‐Moment Correlation and the Spearman's Rank Correlation Coefficients were employed to determine the relationship between the IIT share and the stages of economic development. The test of has been hypothesis was conducted to examine the significance of the relationship. As a result, the paper reveals that the IIT share is more closely related to GNP per capita than to the overall GNP, which suggests that GNP per capita may be a better measure of the stage of economic development.