A Comparative Analysis of the Influencing Factors on Agricultural Intra-industry Trade of Both Sides of the Taiwan Strait

Objective/Meaning The intra-industry trade of agricultural products of both sides of the Taiwan Strait plays an important role in enhancing the agricultural integration of both sies.

Method/Process  The index of G-L and MIIT were used to measure the level of intra-industry trade and a Multiple Gravity Model was employed to comparatively analyze the influencing factors of intra-industry trade of both sides of the Taiwan Strait respectively.

Result/Conclusion The index of indicate the agricultural trade between both sides of the Taiwan Strait has shown the tendency from intra-industry trade to inter-industry trade and Vietnam maintains a high level of intra-industry trade with both sides of the Taiwan Strait. The index of MIIT shows that trade increment between both sides of the Taiwan Strait is mainly driven by inter-industry trade. The index of MIIT between Mainland China and Vietnam, and those of Taiwan-Korean and Taiwan-Thailand are high. Differences in market openness and geographical distance have a significant inhibitory effect on intra-industry trade of both sides of the Taiwan Strait. Agricultural competitiveness has a positive effect on the intra-industry trade of Mainland China whereas its impact is negative for Taiwan. It is important to enhance regional collaboration, harmonize market oneness policies, increase product differentiation, and to reduce logistics costs for further development of agricultural trade of both sides of the Taiwan Strait.