Growth In Intra-industry Trade Research Articles

Analysing the Flow of Intra-Industry Trade in the Central African Monetary Community

This paper empirically examines the flow of Central African Economic and Monetary Community (CEMAC) intra-industry trade at different sectors and product categories using the Standard International Trade Classification (SITC). An augmented gravity model of trade was adopted to analyse changes in the different sectors and product categories from 1995 to 2015; this is the time span for which consistent and useable time series data is available for CEMAC. A time fixed effects variable and within estimator were included to control for unpredictable changes in exogenous factors and capture the heterogeneity of the sample over time. The results showed that prior to the formation of the CEMAC customs union, the growth in intra-industry trade had been higher than that of the CEMAC customs union with the exception of very few sectors and that since the establishment of the customs union in 1994, IIT trade has remained low and only Cameroon has witnessed an increase in trade with member states, especially in food and live animals. The results also showed that only mineral fuels exports had been significant and positive for Chad and Equatorial Guinea.

Trade Composition and Acquiescence to Sanction Threats

In this article, we argue that the composition of trade is an important determinant of vulnerability to sanctions. Trade composition has changed considerably over the years since World War II, with growth in intra-industry trade: the exchange of similar, often branded, commodities that follows from varied consumer preferences and economies of scale. Conversely, we see relatively less of the traditional inter-industry trade: exchange of distinct and often homogeneous commodities that follows from comparative advantage. We demonstrate that targets maintaining higher proportions of intra-industry trade with senders benefit from greater resilience against economic coercion and thus are less likely to acquiesce to sanction threats. Importantly, however, we contend that bilateral intra-industry trade does not necessarily prevent the onset of sanction threats. Statistical tests of sanction threat cases and directed dyad-years spanning 1962–2005 support our expectations.

Intra-industry trade in ICT services in BRIC Countries (2005-2017)

Information and communication technology (ICT) services, a key contributor to the growth and development of the counties, has also been an important item of international trade (both import and export) of emerging economies, particularly the BRIC counties. This paper examines the trends and patterns of exports, imports and intra-industry trade (IIT) in the ICT services in BRIC countries for the period 2005-2017, which has been an area unexplored in the international trade literature. Our analysis, based on the UNCTAD data, revealed that India has been the major contributor of the ICT services exports from the BRIC countries throughout the study period, which was distantly followed by China, while the share of Brazil and Russia has been relatively negligible. However, the growth in the ICT service exports during the study period was highest in China and it was lowest in India. At the same time, China was not only the leading importer of the ICT services among the BRIC counties throughout 2005 – 2017, but the growth rate in the ICT service exports of this country was highest among the BRIC countries. The computed IIT index values indicated the prevalence of intra-industry trade in ICT services, albeit with different intensity, in all the four BRIC countries. Among the BRIC countries, the degree of IIT in the ICT services was highest in Russia followed by China and lowest in India during our study period. The diversity in the nature and quality of the emerging ICT services originated from different countries will lead to further growth of intra-industry trade in the ICT services in BRIC counties and other countries in the future.

Pollution haven hypothesis and India's intra-industry trade: an analysis

With the adoption of trade liberalisation measures India's merchandised trade has expanded considerably in post-1991. One of the important factors of such commendable growth is the significant expansion in India's Intra-industry Trade. Given this circumstance, it is an important task to find out whether such rapid growth in Intra-industry Trade (IIT) has any detrimental effect on the environment. With this purpose, the current paper measures the shares of pollution content of India's 'inter-industry trade' and 'IIT', and its impact on the environment by using Input-Output framework for the period 2001–2002 to 2011–2012. Applying the Grubel-Lloyd index the paper estimates the shares of IIT including Vertical and Horizontal in India's total trade with the USA and the EU-27. It observes that the Vertical IIT is dominant over those of the Horizontal IIT and export in IIT is highly pollution intensive. Above all, the results of Pollution terms of trade provide stronger evidence on the pollution haven effect.

New Zealand–India Trade Relations and Growth Potential: An Empirical Analysis

This study examines the bilateral trade relations between New Zealand and India from 1990 to 2014. Using export and import intensity indices and revealed comparative advantage (RCA) indices, it identifies sectors where there is static and dynamic comparative advantage and complementarities. It also examines the extent and movement of intra-industry trade (IIT), using IIT indices, and analyses these indices to consider how trade patterns and relations have changed between 1990 and 2014. Findings show that trade between New Zealand and India has increased in recent years. The intensity of trade has strengthened, and there has been growth in IIT for a number of industries and product groups. Results also suggest high degree of static and dynamic comparative advantage in a number of product groups. The findings of this study should be relevant to future bilateral trade, economic relations, technology transfer and cultural exchange between New Zealand and India.

Trade patterns in the process of European integration: Evidence for the intraindustrial exchanges of a Mediterranean peripheral region

The aim of this paper is to find out about the impact of the integration processes on peripheral regions, in connection with the growth of nontraditional trade or intraindustry trade. Firstly, the specialization pattern estimating the Grubel and Lloyd Indexes and decomposition by nature differentiation is described. Secondly, an econometric model based on a logistic function is elaborated to explain the determinants of this typology of flow developed in the region. The conclusions are clear: the predominance of the traditional interindustrial specialization and the growth of intraindustry trade differentiated by quality. This implies, according to smooth adjustment hypothesis, a more difficult and harder adjustment process after the exchanges liberalization.

Horizontal and Vertical Intra-Industry Trade of NAFTA and MERCOSUR: The Case of the Automobile Industryy

The NAFTA and MERCOSUR agreements seem to have accelerated the regional integration process respectively within North and South of America. In the South in particular, MERCOSUR has led to trade liberalisation and deregulation, which has resulted in significant growth of its regional trade. In this article, we study the pattern of that trade growth in the automobile industry. Our results highlight an increase of intra-industry trade in the corresponding industry since the beginning of the 1990s. Firstly, we use the Grubel and Lloyd indicator (1975). Secondly, following Abd-el-Rahman (1991), Greenaway et al. (1995), Fontagne and Freudenberg (1997), we distinguish horizontally differentiated goods from vertically differentiated goods using a comparison of the unit values. With the increase of intra-industry trade, it appears that MERCOSUR has favoured in particular the development of trade in vertically differentiated goods. In NAFTA, intra-industry trade exists in most sectors and in two bilateral relations (US-Canada and US-Mexico). In MERCOSUR, the automobile industry has experienced the highest rate of growth in intraindustry trade, which accounts for 66% of total trade and 90% of all intra-regional trade. Thirdly, we analyse the nature of that increase and more precisely, the determinants of intra-industry trade. In order to explain the pattern of trade for the automobile industry, we use a gravity-type model taking into account some country-specific variables.

Is Inequality Harmful for North-South Intra-Industry Trade Growth?

Is Inequality Harmful for North-South Intra-Industry Trade Growth?

Intra-Industry Trade in Agri-Food Products between Hungary and the EU

We present an analysis of the intra-industry nature of agri-food trade between Hungary and the European Union, following the Association Agreement signed in 1991. A slight growth in intra-industry trade (IIT) is indicated by the Grubel-Lloyd index. However, it is not uniform by product group or EU member state or over time, reflecting different patterns of bilateral integration and an economic restructuring process that is far from complete. Marginal IIT appears to be low, but assumes greater significance when the index is broadened to include vertical as well as horizontal IIT. Accordingly, the structure of the change in agri-food trade between Hungary and the EU during the period is shown to be predominantly either intra– industry of a vertical nature or inter-industry. Both are believed to incur adjustment costs that are higher than with horizontal IIT, but the dominance of vertical IIT suggests that the agri-food industries of Hungary and the EU may be developing in a complementary manner, involving somewhat lower adjustment costs than may have been feared.

East-west intra-industry trade dynamics

Trade liberalization, integration and catching-up with the developed countries are often associated with an increase in intra-industry trade. We showed in the literature survey that the reduction of trade barriers is associated with the growth of intra-industry trade. We currently observe that the trade of the selected EU countries (Austria, Germany, Italy, Sweden and the Netherlands) with the CEECs (Czech Republic, Hungary, Poland, Romania, Slovakia, and Slovenia) follows this pattern as well. However, the increase of intra-industry trade is not uniform, but reflects different patterns of integration and progress of industrial restructuring.

Japan's Intraindustry Trade Dynamics

The U.S.–Japan trade dispute has been “in the news” for some time now. It continues to threaten the stability of the world trading order because the United States alleges that the Japanese market remains “closed” to its exports. The Clinton administration has made it clear that it will judge the openness of the Japanese market by “results.” In light of this, this article examines how the pattern of Japan's total multilateral trade and trade with the United States has changed between 1981 and 1991. We find that between 1986 and 1991 more than half of the growth in Japan's total multilateral trade, and all of the growth in trade with the United States, was a result of intraindustry trade (IIT) growth. We also find that most of the growth in IIT is a result of import growth in net export industries. This is the type of trade that the United States has been urging Japan to increase, and it is consistent with an opening of the Japanese market.J. Japan Int. Econ., June 1997,11(2), pp. 123–142. Centre of Policy Studies and the IMPACT Project, Monash University, Clayton, Victoria 3168, Australia.

Regional Trading Agreements and Intra-industry Trade

Do Regional Trading Agreements (RTAs) promote intra-industry trade (IIT) ? In attempting to answer this question, previous researchers have looked at two issues: (i) whether IIT has increased following the formation of the RTA, and (ii) whether IIT is more important in intra versus extra RTA trade. To answer the first question, researchers have used movements in the value of the Grubel and Lloyd (1975, GL) index over time, while the second has been dealt with by comparing the value of the GL index for intra versus extra RTA trade. Employing the GL index in these ways to answer these questions can lead to error. In this paper, we develop a new methodology for analyzing both of these questions which overcomes this problem. First, we derive a formula which decomposes the growth in total trade (TT) into the contributions of growth in IIT and net trade (NT). Second, we show how to measure the contri bution ofinira and extra RTA trade to the growth in a country's total multilat • Address for Correspondence: Jayant Menon, Center of Policy Studies and The IMPACT Project, Monash University, Clayton, Victoria 3168, Australia. * This is a revised version of a paper presented to the 1994 NZAE Winter Conference, Zealand and the International Economy, held at Massey University. We are grateful to participants at this conference and those at a seminar at the Australian National University for helpful suggestions. We also thank Peter Lloyd, Chris Milner and two anonymous referees for comments. Any remaining errors are our own. ©1996 Institute for International Economics, Sejong Institution. All rights reserved. This content downloaded from 157.55.39.136 on Tue, 05 Jul 2016 04:58:04 UTC All use subject to http://about.jstor.org/terms Regional Trading Agreements and Intra-industry Trade eral IIT and NT. These formulas are employed to examine the effects of the Australia-New Zealand Closer Economic Relations Trading Agreement (ANZCERTA) on Australian and New Zealand trade.

The Dynamics of Intra‐industry Trade in ASEAN*

The decision to establish the ASEAN Free Trade Area (AFTA) by the year 2008 has resulted in producers in all ASEAN countries except Singapore raising concerns relating to potential loss of market share and adjustment pressures. Underlying these concerns is the view that the expected growth in intra‐ASEAN trade will be dominated by inter‐industry or net trade (NT) rather than intra‐industry trade (IIT). If most of the expected growth in trade is intra‐industry, however, then the short‐run resource re‐allocation costs are likely to be lower. In this study, we employ a new methodology to analyse the dynamics of IIT in ASEAN. We overcome problems associated with using movements in the value of the Grubel‐Lloyd (GL) index by deriving a formula that decomposes the growth in trade into the contributions of growth in IIT and NT. Our results suggest that the role of IIT in trade growth has been increasing in importance, and thus much of the recent concern that threatens the viability of AFTA may be misplaced.

Why Hasn't Trade Grown Faster Than Income? Inter-Industry Trade Over the Past Century

Over the past century, the ratio of international trade to GDP has not grown substantially for most major OECD economies. We conjecture that growth in intra-industry trade has been offset by a decline in intra-industry trade. Inter-industry trade may have declined either because of biased growth in factor inputs so that factor proportions have become more similar, or because preferences have become more similar with rising per capita income.

Intraindustry specialization in production and trade in newly industrializing countries: A conceptual framework and some empirical evidence from East Asia

This paper argues that as newly industrializing countries continue on a path of industrialization-led growth and development, their pattern of manufacturing production and trade specialization tends to resemble that of the industrial countries. Consequently, the importance of intraindustry specialization in production and trade in certain manufactures increases in newly industrializing countries. This hypothesis is tested in the analysis of intraindustry trade in manufactures of East Asian newly industrializing countries. As expected, the economic development and industrial growth of these countries is accompanied by growth in intraindustry trade in manufactures. A substantial proportion of this trade is with industrial countries.