Level Of Intra-industry Trade Research Articles

The Impact of the Regional Comprehensive Economic Partnership (RCEP) on Intra-Industry Trade: An Empirical Analysis Using a Panel Vector Autoregressive Model

Purpose – This study aims to examine the dynamic relationship between the variables impacted by the Regional Comprehensive Economic Partnership (RCEP) and the level of intra-industry trade among member states, with the ultimate objective of deducing the short- and long-term effects of RCEP on trade. Design/methodology – This study focuses on tariffs, GDP growth rates, and the proportion of regional FDI to total FDI as research variables, and employs a panel vector autoregression model and GMMstyle estimator to investigate the dynamic relationship between RCEP and intra-industry trade among member countries. Findings – The study finds that the level of intra-industry trade between member states is positively impacted by both tariffs and intra-regional FDI. The impulse response graph shows that tariffs and FDI within the region can promote intra-industry trade among member countries, with a quick response. However, the contribution rates of tariffs and intra-regional FDI are not particularly high at approximately 1.5% and 1.4%, respectively. In contrast, the contribution rate of GDP growth can reach around 8.5%. This implies that the influence of economic growth rate on intra-regional trade in industries is not only long-term but also more powerful than that of tariffs and intra-regional FDI. Originality/value – The originality of this study lies in providing a new approach to investigating the potential impact of RCEP while avoiding the limitations associated with the GTAP model. Additionally, this study addresses existing gaps within the research, further contributing to the research merit of the study.

Assessing comparative advantage in agricultural trade

With the growth of globalization, international cooperation increases the pace of development. Each country has a number of competitive advantages that are formed due to geographic, climatic and economic conditions. As part of the study of agriculture, the author noted that the assessment of the country’s comparative advantage cannot be limited to traditional theories of international trade focused on comparative advantage. Attention should be drawn to theories that emphasize the variability of comparative advantage; development of diff erentiated products should be enhanced, high level of intra-industry trade should be developed.

Regional determinants of Colombian intra-industry trade

Using three fixed-effect models, this paper establishes the determinants of regional Colombian intra-industry trade (IIT) from 1995 to 2017 with the aim of establish how regional characteristics generates competitive advantages in some internationals markets and the role of trade agreements in regional IIT. The models use IIT as a dependent variable and calculate IIT using the Grubel & Lloyd index for each tariff group. The explanatory variables used are those traditionally seen in the empirical literature on determinants. Following results are noteworthy: i) Colombian IIT is concentrated in four of the country's 32 regions; ii) IIT is also conducted with nearby countries and consists of labour-intensive goods for which the exporting companies absorb shipping costs; and iii) the current level of IIT has growth potential (with regional differences), given the low specialisation observed in Colombia's dealings with countries with low demand complexity and given the negligible significance of costs.

Trade Deficit of Bangladesh with China: Patterns, Propensity and Policy Implications

This paper aims to examine export, import and trade intensity, export specialization index, Herfindahl-Hirschman index for bilateral concentration and diversification indices to analyze the specializations, structure and trends of deficit in bilateral trade between Bangladesh and China from 1995 to 2018 and policy recommendations in this regard. The results reveal that the gap of export and import intensity between Bangladesh and China is widening rapidly perennial. The export specialization indices expose very significant outcomes where among the analyzed 16 sectors; 6 sectors exhibit high specialization, 3 sectors demonstrate medium, 3 sectors exhibit low and the rest of the 4 sectors disclose no specialization for Bangladesh’s export to China. The findings of the Herfindahl-Hirschman Index (HHI) reveal that from 1995 to 2010 the export of Bangladesh to China concentrated within few sectors but from the year 2011 to 2018 the export has been reclassifying steadily into diversification. The overall analysis of the indices suggests the necessity to be improved of the level of intra-industry trade between China and Bangladesh. Moreover, emphasis should be given to the sectors having a high specialization that endure the capacity to narrow the trade deficit. Furthermore, the export baskets of Bangladesh to China require to be diversified. Hereafter, various measures and implications are also suggested in the policy recommendation for further improvement.

What Leads to Intra-Industry Trade between Sri Lanka and South Asia?

This study ascertains the determinants of Intra-Industry Trade (IIT) with particular reference to IIT between Sri Lanka and its major trading partners in South Asia; namely; India, Pakistan and Bangladesh. The study uses secondary data published in World Development Indicators, Penn World Table from 1992 to 2017. The level of IIT is calculated by using data gathered from Comtrade Data Base. Using panel data regression, the study adopts Random Effect model to analyze the regression results. The study concludes that economies of scale measured by difference of value added in the net output of the manufacturing sector and market size measured by average gross domestic product exert a significant influence on the level of IIT in the South Asian region. Differences of per capita Gross National Income (GNI - difference in income level) and tariff rate (the proxy for trade barriers) poses a negative influence on the level of IIT. The policymakers should be concerned about the possibility to increase IIT in the South Asian region. Based on the findings of the study, the present research offers policy recommendations to promote IIT within the region.

Research on Spatial Dependence and Influencing Factors of Korean Intra-Industry Trade of Agricultural Products: From South Korea’s Agricultural Trade Data

Purpose - Intra-industry trade of agricultural products can eliminate the disadvantage of Korea s traditional agriculture and improve its lack of comparative advantage. The main purpose of this paper is to measure the level and index of intra-industry trade of Korean agricultural products and to explore the spatial dependence and spillover effect associated with this type of trade. The main factors influencing intra-agricultural trade are analyzed from two perspectives: the population and the classification of agricultural products. Design/methodology - First, the level of intra-industry trade of Korean agricultural products is measured. Second, to obtain a more accurate estimate of the influence of various factors, and based on two types of weight matrices, a spatial econometric model is constructed from two aspects: population and classification of agricultural products. The status and the factors influencing intra-industry trade are also studied. Findings - It is concluded that there is a positive spatial correlation between Korea’s intra-industry trade in agricultural products and that of its trading partners. The spatial spillover effect of this type of trade is verified by using the spatial autoregressive model (SAR). Labor-intensive agricultural products are found to have a positive spillover effect on intra-industry trade, while land-intensive products do not have a significant effect. Originality/value - In this paper, the two types of agricultural products are meticulously distinguished, and the spatial effect of the intra-industry trade of agricultural products as well as the influence of various factors are analyzed. In addition, the accuracy of the estimation of the coefficients of the factors by using the spatial econometric model is higher than that of the ordinary panel data model.

ОЦЕНКА ПОТЕНЦИАЛА РОСТА ПРОИЗВОДСТВА И ЭКСПОРТА КОНКУРЕНТОСПОСОБНОЙ ПРОДУКЦИИ АГРОПРОМЫШЛЕННОГО КОМПЛЕКСА (Estimation of the Potential for Growth of Production and Export of Competitive Products of the Agroindustrial Complex)

Russian Abstract: Определены стартовые позиции российского агарного экспорта при реализации федерального проекта, состоящие в слабой диверсификации, низком уровне внутриотраслевой торговли, снижении конкурентоспособности по продуктам высоких переделов. Оценен потенциал роста экспорта по товарам, не обладающим сравнительными преимуществами, и по конкурентной сельскохозяйственной продукции – зерну и подсолнечнику. Russian Abstract: The starting positions of Russian agar export in the implementation of the federal project have been determined, consisting in weak diversification, a low level of intra-industry trade, and a decrease in competitiveness for products of high value added. The potential of export growth for goods that do not have comparative advantages and for competitive agricultural products - grain and sunflower is estimated.

Analysis of Intra-Industry Trade in Cosmetic Commodities between Indonesia and Nine Trading Partners in The Asian Region in 2004-2018 Period

<p align="justify">This research aims to analyze the level of intra-industry trade and the effect of average country size, average per capita income, difference in per capita income, distance, and average tariff on intra-industry trade of cosmetic commodities between Indonesia and nine trading partners (Singapore, Malaysia, Thailand, Philippines, India, China, Hong Kong, Japan, and South Korea) from 2004-2018. This study uses a Grubel-Llyod Index to determine the level of intra-industry trade and static panel data method to see the effect of independent variables on the level of intra-industry trade. The result shows that the level of intra-industry trade of cosmetic commodities between Indonesia and its trading partners (except India) still tended to be low. The average country size, average per capita income, and average tariff have a positive and significant effect on the level of intra-industry trade. Meanwhile, the difference in per capita income and distance have a negative and significant effect.</p>

Intra-industry Trade in Croatia: Trends and Determinants

This paper investigates trends and determinants in intra-industry trade in Croatia. Intra-industry trade refers to a two-way trade of differentiated products. The level of intra-industry trade between Croatia and EU, CEE, and countries worldwide is calculated using the Grubel-Lloyd index under HS-2 and HS-4 product groups. Dynamic changes in intra-industry trade are shown by calculating marginal intra-industry trade indices. In addition to this, bilateral weighted adjusted intra-industry trade indices for Croatia and 24 most important trading partner countries are calculated in the period from 2001 to 2017. A panel-econometric analysis investigates the determinants of intra-industry trade in Croatia using a random effects model due to time-invariant characteristics of some determinants. The results of the analysis show that gross domestic product, common border, EU membership, and the distance between Croatia and trading partner countries have significant influence on the level of intra-industry trade in Croatia.

MAPPING THE INTRA-INDUSTRY TRADE IN SOUTH ASIAN COUNTRIES THROUGH GRUBEL-LLOYD APPROACH: A SPECIAL FOCUS ON THE VEGETABLE TRADE

Global nations are striving for sustainable growth and enhancing the welfare of the society. In the course of development, it is observed that the international trade plays a protuberant role in achieving the above mentioned goals. The intra-industry trade is the stylized fact of the modern trade, which constitutes a considerable portion in the total volume of trade. Against this theoretical background, the present study investigates the level of intra-industry trade with respect to vegetable trade in South Asian countries such as Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. In order to execute the task, secondary data on total volume of export and import of vegetables have been collected from the Direction of Trade Statistics, published by International Monetary Fund and Commodity Trade Data, published by WITS. The study covers the period from 1988 to 2018, which is the recent data available in the above mentioned sources. The analysis of the study involves two folds: at first the specialization of trade has been computed using Helpman and Krugman's (1985) general equilibrium model and the intra-industry trade has been estimated using Grubel-Lloyd Index (1975). The result of the study revealed that both Maldives and Sri Lanka are the net importers of the vegetables as the trade specialization index is negative. At the same time, the average intra-industry trade has been decreasing over the study period in South Asian countries.

An Empirical Analysis of the Influence Factors on the Automobile Intra-industry Trade in Guangzhou

As the pillar industry of Guangzhou, the automobile industry is getting larger and larger, and the level of intra-industry trade is increasing year by year. Through the empirical research of econometric models, it’s found that the automobile intra-industry trade in Guangzhou is mainly influenced by the following factors such as the average level of Guangzhou’s automobile market size, the RMB exchange rate, the scale economy of the automobile industry, the degree of trade imbalance, and R&D expenditure. Among them, the scale economy of the automobile industry and R&D expenditure are in positive correlation, while the other factors indicate a hindrance.

Determinants of Intra-Industry Trade between Vietnam and Countries in TPP

Intra-industry trade (IIT) has played an important role in international trade of Vietnam as a result of rapid growth of the country. This article investigates the level of IIT between Vietnam and 11 trading partners in Trans-Pacific Partnership (TPP) over the period 2000- 2014. Although there have been a large number of empirical researches contributed to the determinants of IIT, most of them only pay attention on developed countries where the trade flows are similar due to similar demand structure and production technology. Until now, there is no study on intra-industry trade between Vietnam and countries in TPP that Vietnam recently signed a trade agreement in early 2016. IIT is measured by the Grubel–Lloyd index. The index shows that the extent of intra-industry trade between Vietnam and the trading countries is not high due to the level of economic development and the market size. The determinants of IIT are examined using a panel regression model. In the empirical analysis, the results indicate that Vietnam’s intra-industry trade is positively correlated with country size, while it is negatively correlated with income dissimilarity, the trade openness, and geographical distance. This study contributes to the new theoretical trade theory on the evidence of developing country’s IIT.

Potencijali izvoza uljarica iz Srbije

Oil crops are very significant, both in the world and in Serbia. In terms of production, the three most important oil crops in Serbia are sunflower, soybean and rapeseed. Beside significant oil crops production, substantial quantities of oil are produced as well due to significant processing capacities in Serbia. Considering the fact that over the last few decades Serbian market has been characterized by integration with the international market and considering the actual market liberalization with the EU, CEFTA countries, Russia and others, this paper analyses production and export of oil crops with special emphasis on comparative advantages in the export of oil crops using the method of revealed comparative advantage. Also, the level of intra-industry trade is considered in relation to the international market, EU and CEFTA countries. The results indicate that oils have more significant comparative advantage on the international market, especially sunflower oil.

How Can Intra-Industry Trade of Forest Products be Promoted? An Empirical Analysis from China

Understanding the evolution of the intra-industry trade of forest products between China and its main partner countries is a prerequisite for improving the flow of trade. The intra-industry trade status and the main influencing factors of Chinese forest products trade were measured and identified via use of bilateral forest product trade data between China and its 24 partners from 2000 to 2014, and use of static, marginal, and structural intra-industry trade indices. The results show that, firstly, intra-industry trade of the major Chinese forest products is exhibiting a low-level growth trend and has considerable growth potential. The top five countries with relatively high intra-industry trade levels are Italy, Germany, the United States, Vietnam, and Japan, and the bottom five are New Zealand, Chile, Brazil, Russia, and Spain. Secondly, the intra-industry trade among China and 13 countries, represented by South Korea, is low quality and vertical-type trade; the intra-industry trade among China and seven countries, represented by Thailand, is high quality and a vertical type of trade. Finally, the empirical analysis shows that trade openness and geographical distance are the key factors of intra-industry trade of forest products. The per capita gross domestic product gap, urbanization, foreign direct investment, forest area, and import and export value of forest products also have certain impacts on intra-industry trade.

Vietnam-China Trade Relations and the Effects of the US-China Trade War

By calculating the trade indexes (TII, RCA and IIT), mainly in the period 2001-2017, the article analyzes current situation of the dependent relationship and ability to complement each other on trade between Vietnam and China. The results show that Vietnam and China are increasingly becoming important trade partners of each other; Vietnam and China have a particular advantage in the export structure of its exports, showing the trade relations between the two countries are complementary to each other; and the level of intra-industry trade between Vietnam and China is quite high. The US - China trade war broke out will cause the reversal of the global trade environment. However, in short term, the trade context of the Vietnam - China less affected by this tension. But in the long term, the sanctions are expanded to different sectors will can have unpredictable effects.

Intra-Industry Trading Factors and Patterns in ASEAN-5 Region

The large expansion of trade in the form of Intra-Industry Trade (IIT) in ASEAN is driving large volumes and variety of traded goods and is changing patterns of trade across members. This paper examines the factors affecting the level of IIT for ASEAN-5 countries (Indonesia, Malaysia, Philippines, Singapore, and Thailand) in the period of 2004-2014. IIT is measured with Grubel-Lloyd index covering ten different one-digit SITC categories. The result indicates a large Intra-Industry Trade among ASEAN countries and across most manufacturing sectors. IIT Index is employed as a dependent variable, and four variables are used as independent variables: 1) different GDP per capita, 2) foreign direct investment (FDI), 3) trade openness, and 4) distance. Different GDP per capita and trade openness have a positive effect on IIT. FDI does not affect IIT, and distance has a negative effect on IIT across intra-ASEAN trade. Keywords: International Trade, Intra-Industry Trade, Grubel-Lloyd, Panel Data Analysis

Intra-Industry Trade and Determinant: Evidence for ASEAN-Australia and New Zealand in the Context of AANZFTA

This study examines the changing patterns and direction of trade between Association of South- East Asian Nations (ASEAN), Australia and New Zealand in the context of the ASEAN-Australia-New Zealand Free Trade Area/Agreement (AANZFTA) signed in 2010. It investigates the extent of ASEAN’s intra-industry trade with Australia and New Zealand at the 3-digit disaggregated SITC level for the period 1990 to 2014. The study includes an analysis of intra-industry trade indices of trade intensities, the marginal intra-industry trade and the econometric model to identify the determinants of intra-industry trade. The results show that trade in general has increased and intra-industry trade between ASEAN-Australia increased specifically in manufacturing. New Zealand has developed intra-industry trade in both the manufacturing and agriculture sectors. Marginal intra- industry results suggest that some industries transforming from inter-industry trade patterns to intra-industry trade. The results of regression analysis provide some support to the thesis that increase in IIT comes naturally with high average incomes of trade partners and large average market size. As a country’s level of income goes up and its standard of living rise, its citizens tend demand and consume more high quality differentiated products, leading to higher levels of intra-industry trade. This study differs from the existing literature in terms of its scope, methods and policy perspectives. The findings have policy relevance for the ongoing negotiations for a regional comprehensive economic partnership with ASEAN 10, India, China, Japan, Australia and New Zealand. It is reasonable to suggest that intra-industry trade be given due consideration in ongoing regional and bilateral trade negotiations for potential mutual gains from trade for a sustainable regional economic growth.

THE COMPETITIVENESS OF AGRICULTURAL AND FOOD PRODUCTS OF MOLDOVA ON THE FOREIGN MARKETS: ASPECTS AND TENDENCIES

Competitiveness has become a key issue on international markets since it can beconsidered as the major source of export development. A country that utilizes thebest its resources within its agricultural sector may benefit from comparativeadvantage on international agricultural markets. The paper analyzes the agriculturaland food trade of Moldova from different aspects of inter and intra industry trade.The aim is to estimate the trend and extent of inter and intra-industry trade inagricultural and food products of Moldova. The time series from 2001 to 2015 areexamined. Moldova’s share on agri-food exports is still large, but various changesoccurred in the total value and the geographical structure of trade flows during theanalyzed period. The analysis of competitiveness was through estimation of intra -industrial and inter- industrial trade indices (Relative Trade Advantages (RTA),Grubel-Lloyd (GL)). The obtained results indicate which agri-food products werecompetitive, which had relative advantages and a potential to increase itscompetitiveness. The level of intra-industry trade in agricultural and food productsfor Moldova is quite high (78%). The results of the intra-industrial trade levelindicated a decrease in European Union (EU) countries and increase in relationwith Commonwealth of Independent States (CIS) countries. For most commoditygroups the GL values presented average high variability over time, fact whichreflected the structural changes in Moldavian agri-food trade.

COMPARATIVE CHARACTERISTICS OF INTRA-INDUSTRY TRADE BETWEEN UKRAINE AND EU THROUGH GRUBEL-LLOYD INDEX

In this article is analyzed the level of intra-industry trade with Ukraine, the latest publications and the substantiated purpose and methodology of work are investigated. The issue of intra-industry trade of Ukraine and the EU as a factor of the effectiveness of integration was examined. Calculations of the total quantity and value of a number of imported and exported goods of Ukraine for January-September of 2017 were made; calculated the index of mutual trade of certain goods, which characterizes the level of intra-industry trade between the investigated objects. As a result, a comparative analysis of the Grubel-Lloyd index of goods of certain groups was carried out, and prospective and decadent groups were identified. It is stressed that the Ukrainian producer actively cooperates with the EU in certain industries, but trade in some of the studied product groups is in active development. In the end, an understanding of the prospects and current problems of Ukraine's integration into trade with the countries of the European Union was presented. There is a conclusion that, as of 2017, the dynamics of growth of the index of intra-industry trade between Ukraine and the EU is positive for 60% of goods and for others 40% is negative or more stable.

Determinants of India’s Bilateral Intra-industry Trade over 2001–2015

Over the last decade India’s integration in international production networks (IPNs) has deepened, with growing simultaneous export and import within product categories. This has been facilitated by India’s entry into several regional trade agreements (RTAs) and multilateral tariff and non-tariff barriers reforms. The present paper examines the patterns and determinants of aggregate bilateral intra-industry trade (IIT) between India and 25 major trading partners during 2001–2015 in a panel data framework. India’s bilateral IIT indices with select countries generally display an upward trend over the sample period. The empirical results indicate that vertical intra-industry trade (VIIT) significantly explains India’s IIT pattern with the selected countries. The analysis further concludes that trade facilitation among the trading partners may significantly enhance bilateral IIT level with respect to India’s high-income partners, while the same effect is non-significant for low-income countries. Interestingly, the preferential trade dummy is found to be non-significant, implying limited influence of the RTA partnerships on India’s aggregate bilateral IIT. The empirical results underline the need for fast-tracking the trade facilitation-related reforms.