Theoretical And Empirical Study On Intra-Industry Trade In Agricultural Products

Intra-Industry Trade (IIT) is the research focus of international economics. IIT theory explains the international trade fact commendably. Many economics theory assume that agricultural products market is perfect competition market, and assume that agricultural products are homogenous. This is beyond the condition of IIT, and comparative advantage theory can explain the international trade of agricultural products. But, IIT of agricultural products is the fact in international merchandise trade. We must explain the phenomenon from theoretic angle of view. It is important not only at theory research but also at practice.In this article we consider that comparative advantage theory have inherence bug. It can't explain IIT phenomenon involved agricultural products. It's hypothesizes are so strict that it's not accordant with economy reality. In addition, the condition which is coherent with comparative advantage theory has changed. It will take much bad influence if one country uses comparative advantage principle chronically, such as immiserizing growth etc.IIT theory which based on economies of scale, imperfect competition and different products explain the IIT phenomenon commendably. IIT theory advance a series of policy measures which is different from comparative advantage theory. We analyze the applicability of IIT at agricultural products international trade after introduction of IIT theory. We consider that IIT theory is appropriate to explain agricultural products trade although it is founded based on manufacture products.There is much trend and character which is inconsistent with comparative advantage theory in current agricultural products trade. At the same time, IIT phenomenon is obvious more and more. Modern agriculture creates industry base for IIT of agricultural products, and it offer source of advantage. We consider the difference of agricultural products is subsistent. And we forecast it will be remarkable with the progress of technology. The diversification preference is customer's nature. Customer must have diversification preference to agricultural products with the improvement of life level.We study the IIT of Chinese agricultural products after introduction of IIT theory. The result indicates that IIT of Chinese agricultural products has grown quickly. The products kinds of IIT are widening. The research show that the determine factors of IIT of Chinese agricultural products is market scale, market scale difference and urbanization difference.We analyze the static income and dynamic income of IIT of agricultural products. Based on the front analyses, suggestions are mentioned for IIT of Chinese agricultural products.