Linder hypothesis revisited

Abstract

Linder posed a hypothesis in 1961 that the closer the preference structure between two countries is, the bigger the trade volume becomes. The empirical results using pooled trade data from 63 countries for 1970, 1980, 1990, and 1992 are in support of the Linder hypothesis. It is also found that the Linder hypothesis gained strength in the 1990s. Recent globalization may have strengthened the Linder hypothesis.