  Studying intra-industry trade involves theoretical explanations and empirical
methods to measure the phenomenon. Indicators have been developed to measure
the intensity of intra-industry trade, leading to theoretical models explaining
its determinants. It is essential to distinguish between horizontal and
vertical differentiation in empirical analyses. The determinants and
consequences of intra-industry trade depend on whether the traded products
differ in quality. A method for distinguishing between vertical and horizontal
differentiation involves comparing exports' unit value to imports for each
industry's intra-industry trade. This approach has limitations, leading to the
need for an alternative method.
