Answer : As Develop countries resources are properly used and
have economics of scale as compare
to developing or underdeveloped countries. These
countries are capital abundant and in order to maximize there
profit they hired cheap labor of developing or under developed
countries.
Advantages for Developed countries in higher intra industry
trade are :
- Benefit or proper usage of economics of scale that developed
countries have and lower cost product available to the
consumer.
- Increases the variety of product of the same industry which is
benefit both business as well as consumers.
- Developed countries followed intra industry because to enjoy
higher income .
- Differentiation of product leads to higher profit in the market
area.
- Same product should be exported and imported but sometimes in
vertical intra industry strategy comparative advantage has been
gained.
- Developed countries will gain more economic benefit if they
adopt for horizontal and vertical intra industry strategies.