ABSTRACT
A significant portion of world trade in processed food is increasingly composed of intra-industry trade (IIT), where IIT is trade between two countries in products that are close substitutes for each other (Tharakan 1985). A widely studied example of IIT is in manufactured goods, such as automobiles. Unlike the neoclassical theory of comparative advantage, where nations with complementary resources trade, Linder (1961) has argued that IIT will be most prevalent between countries with similar economies.
