A RE-EXAMINATION OF THE LINDER HYPOTHESIS: A RANDOM-EFFECTS TOBIT APPROACH

Authors: MCPHERSON, M. A.; REDFEARN, M. R.; TIESLAU, M. A.

Source: International Economic Journal, Volume 14, Number 3, Number 3/Autumn 2000 , pp. 123-136(14)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

This paper examines one of the main theories of international trade, the Linder hypothesis, using data from the OECD countries. The paper makes two primary contributions. First, significant empirical evidence is found in support of Linder's hypothesis regarding demand similarity for 18 of the 19 OECD countries under investigation here. Second, the use of a censored dependent variable in this analysis corrects a major methodological shortcoming in the existing literature by including data on all potential trading partners, even when the given OECD country has a zero or negative desire to export to that potential trading partner. [F10]

Document Type: Research article

DOI: http://dx.doi.org/10.1080/10168730000080024

Affiliations: 1: University of North Texas

Publication date: 2000-09-01