One attempt to explain IIT was made by Finger (1975), who thought that occurrence of intra-industry trade was “unremarkable” as existing classifications place goods of heterogeneous factor endowments in a single industry.
[3] It is questioned whether the model applies to IIT at all, as it does not address directly trade between goods of similar factor endowments.
Krugman argues that economies specialise to take advantage of increasing returns, not following differences in regional endowments (as contended by neoclassical theory).
[4] He developed the Heckscher-Ohlin-Ricardo model, which showed that even with constant returns to scale that intra-industry trade could still occur under the traditional setting.
[5] Intra-industry trade is difficult to measure statistically because regarding products or industries as "the same" is partly a matter of definition and classification.
For a very simple example, it could be argued that although a BMW and a Ford are both motor cars, and although a Budweiser and a Heineken are both beers, they are really all different products.