A fragmentação da produção e o comércio intra-setorial vertical português:a industria de componentes de automóveis

The role of multinational enterprises (MNE) in the fragmentation/outsourcing of production can be observed in international trade. The trade in automobile components between different units of MNEs is a good example of this type of trade, namely, vertical intra-industry trade (VIIT). This paper examines the determinants of vertical intra-industry trade (VIIT) in the automobile components industry, involving Portugal and the European Union 27 (EU-27), the BRIC (Brazil, Russia, India and China) countries and the United States in the 1995-2006 period. Using panel data analysis, the results show that the difference in relative factor endowments between Portugal and its trading partners is a major cause of production fragmentation in our automobile industry. Our results also confirm the hypothesis that this type of trade in components increases when transportation costs decrease