and long term [i.e lasting, or expected to last, for 12 months or more] effect on his or her ability to carry out normal day-to-day

There are few empirical studies on IIT between developing and developed countries. In this group is Clark and Stanley (1999), who identify country and industry-level determinants of IIT between the United States and developing countries. IIT was found to decline with greater differences in relative factor endowments. Economic size and trade orientation of the developing countries influence IIT in a positive way. Distance exerts a negative effect on IIT. Results show IIT occurs in nonstandard, made-to-order, vertically differentiated, labour intensive products produced by large globally integrated industries. No empirical support was provided for the role of scale economies in determining North-South IIT.

Mc Mahon (2003) reviewed literature underlying the theory and measurement of IIT.

Empirical findings on the level of IIT between South Korea and the EU were presented by the study. His results are based on the top 500 imports and exports between the EU and South Korea gathered from the Korea International Trade Association (KITA) database between 1990 and 2001, and tested using the Grubel and Lloyd index of IIT and the Brülhart ‗A‘ index of MIIT. Nilsson (1999) analysed determinants of IIT between EU countries and the developing countries. The study examined that EU IIT with the developing countries have greatly increased. Nilsson (1997) analysed the EU's IIT between 1980 and 1992 using a new measure of IIT. The empirical results confirm the hypotheses that IIT increases with greater capital intensity in production and with larger

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average market size, and decreases with differences in factor endowments and a greater difference in economic size. Transport and transaction costs are also found to negatively affect EU IIT with the developing countries.

Sunde, Chidoko and Zivanomoyo (2009) investigated the determinants of intra industry trade between Zimbabwe and its trading partners in the Southern African Development Community (SADC) region using modified gravity model. The study also proved that similarity in per capita income is not the main determinant of IIT between Zimbabwe and its SADC trading partners. It was reported that intra industry trade does not necessarily take place among countries with similar economic structures and level of development. The results of the study show that per capita income, trade intensity, distance, exchange rate and gross domestic product explain IIT (IIT) between Zimbabwe and its SADC trading partners.

Zhigang (1999) examined the characteristics of the trade partners that influence China‘s IIT and linked the pattern of IIT of different industries to different types of economies.

There upon, he identified which factor is more important in the IIT, for different types of economies in the long run. First, IIT is becoming important in China‘s foreign trade, especially for manufactures. As the foreign trade expanded, the share of IIT moved upward in the trade with its principal trade partners, namely the DMEs and NICs.

Among the determinants of IIT, the market size and income level, are the most important ones to China, especially for the manufactures. The roles of other factors to China‘s IIT are usually indirect and implicit.

Liao (2006) examined the North-South IIT on a 4-digit aggregated trade flows level. By building a differentiated-product and North-South trade model, he illustrated that the IIT between North and South is determined by country-specific as well as industry-specific variables. Specifically, sectoral IIT (IIT) index is jointly determined by similarity of GDP between countries, marginal cost, elasticity of substitution of consumers, and industrial tariffs from both countries. The question addressed in this study is the specification of consumers‘ perception toward similar Northern and Southern products,

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and how the perception affects the IIT. In this study, consumers‘ perception is defined as the elasticity of substitution between products made in different ―countries of origin‖.

Controlling the quality difference between Northern product and Southern products, they identify the substitutability between these two products from consumers‘ perspective.

Hu and Ma (1999) measured the extent of the international IIT of China, and tested empirically various country-specific and industry-specific hypotheses concerning the determinants of vertical and horizontal IIT between China and her major trading partners. It is revealed by Hu and Ma (1999) that China has possessed the prerequisite of IIT and that China's IIT follows similar patterns of those in developed countries as China is moving towards a market-oriented economy. Manrique (1987) focused on the trade between an industrial country, (the United States - US), and a subset of LDCs, (the newly industrialised countries - NICs). Specifically, he presented calculations of the share of IIT in the manufactured goods trade of the United States and the NICs for the years 1967, 1972, 1977, and 1982 and found that IIT was present even before these LDCs were designated as NICs in the late 1970s and the proportion of US-NIC trade has that is intra-industry in nature has increased.

Kandogan (2003) analysed trends in different components of trade of transition countries to explain the cross-country differences. The paper points out the important distinction between determinants of ITER and IIT (IIT), as well as horizontal and vertical IIT. Using varieties of gravity models, it is shown that variables from increasing Returns Trade Theory, such as scale economies, similarity of income levels, and number of varieties produced play important roles in IIT, especially in horizontal IIT. Whereas factors such as comparative advantage, dissimilarity in income levels and having more developed trade partners from Heckscher–Ohlin Trade Theory are crucial in determining ITER and vertical IIT to a lesser degree.

Balassa and Bauwens (1988a) examined the determinants of international trade in manufactured goods in 152 industries among 38 major exporters of manufactured goods in a combined inter and IIT framework of a multi-country and multi-industry model. It

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has considered the impact on bilateral trade in individual industries of the factors affecting inter-industry and intra-industry specialisation, together with that of gravitational factors. The relative capital intensity of exports is positively correlated with relative capital abundance. The results show that trade between any two countries is positively correlated with their average per capita income and country size and negatively correlated with inter-country differences in these variables. Also, product differentiation tends to increase IIT, where as product standardization tends to reduce it.

Finally, offshore assembly has a positive impact on IIT.

Glejser, Goossens and Vandeneede (1981) made a distinction between supply (export) specialisation and demand (import) specialisation, both of which can occur between activity sectors or inside them. It shows that intra-industry export specialisation mostly characterised high-wage countries whereas low-wage nations tended to achieve inter-industry export specialisation. Intra-inter-industry import specialisation on the other hand, was the rule everywhere except in the very low-wage countries. Finally, the drift to intra-industry export specialisation slowed down from 1970 to 1973 as compared to 1959 to 1970 inside (but not outside) the EEC.

Bano (2009) analysed intra-industry and inter industry trade between New Zealand, Australia and selected Asia-Pacific nations during the period 1990 and 2009, (a period of trade liberalization). The Grubel-Lloyd and Aquino indices are used to calculate the intensity of IIT (IIT) at the 3-digit SITC level. IIT index was estimated across industries and trading partners to show the strength of trade relations between New Zealand and the other countries. The results suggest that removal of trade barriers through bilateral and multilateral negotiations has enhanced IIT and the intensity of trade.