The aim of this paper is to analyze the main explanatory factors of Spanish intra-industry trade. We follow both an industry and a country approach, so we must add specific vanables in order to collect the explanatory characteristics of the countries involved as well as the industrial items. The endogenous variable is the adjusted Grubel-Lloyd index. We present Non-Linear OLS (logistic function) results. The econometric tests lead us to conclude that Spanish intra-industry trade is based on the exchange of horizontally differentiated products, manufactured in human capital intensive industries with scale economies. Furthermore, similarity in tastes and absence of comparative advantage have positive effects on the intra-industry trade. However, aggregation problems have been detected. Generally, the results agree with previous empirical works; moreover, they confirm the need to include additional variables in the analysis of intra-industry trade in the case of Spain.

Keywords: intra-industry trade, scale economies, product differentiation, country similarities.