This work deals with the empirical phenomenon of intra-industry trade, i.e. trade in similar goods between similar countries. It treats this phenomenon from the point of view of the theory of production structure, highlighting the importance of sequential nature of production and heterogeneity and specificity of factors of production. The reader is first exposed to the historical development of production and capital theories. Simple theory of production structure is then presented and a useful tool for the analysis of intra-industry trade is developed. In the following discussion of existing...