Measurement Of Intra-industry Trade Research Articles

U.S. intra-industry trade in air transport services: measurement and results

The paper deals with the measurement of intra-industry trade (IIT) in air transport services and it´s components (passenger and air...

Measurement of intra-industry trade (ITT) of Iran with ten selective major trading partners using Grubel-Lloyd Index

This paper was conducted to measure intra-industry trade of Iran with ten selective major trading partners including the United Arab Emirates, Germany, China, Republic of Korea, Italy, India, Japan, Turkey, Spain, and Singapore using Grubel-Lloyd index. Due to the development of cross-border economic relationships, these countries try to find and present an appropriate model for production, import, and export of goods and identification of business opportunities and comparative advantages. Therefore, intra-industry trade of products helps countries to consider the differences between their real commercial comparative advantages and other countries and then try to find new technologies in their production. It can be found from estimation the average of Iran’s intra-industry trade with its major trading partners that most of Irans trade volume during the studied period belongs to India with an average of 66.43 per cent. In other words, India is the largest trading partner of Iran in terms of intra-industry trade.

New Measures of Intra-Industry Trade Between Colombia and the United States: 1995-2005

This paper analyzes the existence of intra-industry trade between Colombia and the United States, using the information of the CEPII BAC database for the period between 1995 and 2005. The relevance of establishing a measure of intra-industry trade flows between Colombia and the United States relies primarily on the relative importance of representing the United States as a trading partner for Colombia. Bilateral trade between Colombia and the United States includes about 5,000 different products, however, only 451 products have simultaneous flow of exports and imports of these 119 have an index G & L under 25, for example 4.7% of intra-industry trade exist between Colombia and the USA. The export supply from Colombia to the United States consists mainly of 11 products, which have been included in the negotiations of the Free Trade Colombia United States.

A cross-industry analysis of intra-industry trade measurement thresholds: Canada and the United States, 1988–1999

The measurement of intra-industry trade allows for the separation of horizontal from vertical intra-industry trade using thresholds to categorize different types of trade. Using product-level data on Canada–United States international trade and corresponding cross-industry determinants, this study tests the sensitivity of these thresholds finding that previous studies may have incorrectly specified the measurement of intra-industry trade.

On the Measurement of Changes in Product Quality in Marginal Intra-Industry Trade

There is a long established thread of the international trade literature concerned with the measurement of intra-industry trade (IIT). Two distinct strands of the literature have developed: First, measures of marginal IIT that are concerned with the adjustment implications of volume-based changes in IIT; second, measures of vertical and horizontal IIT that are concerned with quality-based differences in IIT. This paper marries the two literatures to provide a new perspective on the smooth adjustment hypothesis debate and suggests the use of the marginal product quality index, a new measure of changes in quality in matched trade changes that complements dynamic measures of volume-based IIT.

Intra-industry trade in horizontally and vertically differentiated agri-food products between Hungary and the EU

Horizontal and vertical intra-industry trade (IIT) in agri-food products between Hungary and the EU is investigated. Intra-industry trade is separated into horizontal and vertical components on the basis of differences in unit values. Three different approaches to measuring IIT are employed and tested using standard regression models. Results show that horizontal IIT in agri-food products is low, but vertical type trade is more prevalent, though still less important than inter-industry trade. The results lend support to the contention that there are different determinants for horizontal and vertical IIT. More importantly, using a measure of IIT that reflects the level of trade produces better regression results than those based on the degree or share of IIT. The model relating to Hungary’s vertical IIT in agri-food products yields the most promising results in terms of a priori expectations.

Study of the Measurement and Determinants of Intra-industry Trade in East Asia*

The present paper investigates the development of intra-industry trade (IIT) among the East Asian economies over the 1970–1996 period. A dynamic index is used to capture the changes in the structure of trade flows. Based on this approach, IIT is decomposed into horizontal (HIIT) and vertical components (VIIT) and the determinants of each are investigated. The results show that both HIIT and VIIT have exhibited increased importance over the sample period in manufacturing. Using pooled panel data the two-way trade in all measures of IIT is found to be positively related to the country-specific variables, such as the market size, exhange rate depreciation, the levels of development and income, and negatively to the geographic proximity of the partners. Economies of scale are seen to have a positive influence on IIT and HIIT, but a negative relationship with VIIT. Although the relative openness of a country's trade regime shows no significant relationship with any form of IIT, a trade imbalance does affect IIT and HIIT flows. The findings have implications for assessing the structural adjustment costs associated with the trade liberalization process as HIIT is associated with demand for variety and relates to two-way trade in goods of similar quality, while VIIT is driven by international specialization and differences in relative factor endowments.

Vertically Differentiated Trade and Differences in Factor Endowment: The Case of Agri-Food Products between Hungary and the EU

The paper investigates the relationship between factor endowment and vertical intraindustry trade (IIT)in agri-food products between Hungary and the EU. Intra-industry trade is separated into its horizontal and vertical components on the basis of differences in unit values. Three different approaches to measuring IIT are employed and these are then tested using panel regression models. Results show vertical type trade is predominant in total IIT for agri-food products. In order to achieve more general results, we consider different types of productive factors: land, human and physical capital. Using Flam and Helpman type vertically differentiated trade models, we find a positive relationship between factor endowment and vertical IIT. More importantly, using a measure of IIT that reflects the level of trade produces better regression results than those based on the degree or share of IIT.

Economic Integration and the Evolution of Trade: A Geometric Interpretation of Trade Measures

The increase in global trade and the ongoing erosion of trade barriers makes the analysis of trade patterns one of the key areas in international economics. Much of the post-war expansion of trade took the form of intra-industry trade (IIT). This paper presents a simple geometric tool to analyse trade patterns specifically inter and intra-industry trade and the compatibilit y between levels and measures of IIT. The applicability our methodology is demonstrated using the UKs trade experience during the critical period of EU integration 1988-1997.

Tests of the empirical classification of horizontal and vertical intra-industry trade

Tests of the Empirical Classification of Horizontal and Vertical IntraIndustry Trade. — Using longitudinal data this paper shows the separation of international trade in (a) inter-industry trade, (b) horizontal intra-industry trade, and (c) vertical intra-industry trade used in the empirical trade literature to be non-stable at the individual product level. The high level of vertical intra-industry trade mentioned in the empirical literature probably covers up many products shifting between e.g. vertical and horizontal intra-industry trade. The paper therefore questions the work of the last decade in the measurement of intra-industry trade.

Labour-market effects of intra-industry trade: Evidence for the United Kingdom

Labor-Market Effects of Intra-Industry Trade: Evidence for the United Kingdom. — According to the “smooth adjustment hypothesis”, the labor-market adjustment costs entailed by trade liberalization are lower if trade expansion is intra-industry rather than inter-industry in nature. In this paper, we study the link between trade and labor market changes in UK manufacturing industries during the 1980s. We use industry-level measures of unemployment duration and wage variability as proxies for adjustment costs, and we relate them to various measures of intra-industry trade. Our evidence offers some support for the smooth adjustment hypothesis.

Measuring marginal intra-industry trade

Measuring Marginal Intra-Industry Trade. — Trade liberalisation and adjustment: how important is intra-industry trade? This paper focuses on the appropriate measurement of intra-industry trade as indicator of structural adjustment costs. It is argued that existing dynamic versions of the Grubel-Lloyd index reflect horizontal trade only and classify vertical intra-industry trade with inter-industry trade. The paper proposes a method to distinguish between horizontal and vertical trade and applies these techniques to emerging trade between the EU and the economies of central and eastern Europe.

Static and dynamic measurement of intra-industry trade and adjustment: A geometric reappraisal

Static and Dynamic Measurement of Intra-Industry Trade and Adjustment: A Geometric Reappraisal. — The principal analytical device used is an industry “trade box” that allows the authors to geometrically examine changes in intra-industry trade (ITT), total trade (TT), net trade (NT) and the Grubel and Lloyd (GL) index as a result of movements in trade points. The authors propose an approach to measure changes in both the absolute and relative valuesof ITTand NT with respect to changes inTT. Their methodology highlights a number of weaknesses with the existing literature on marginalIIT and provides a methodology that can be applied to investigate adjustment implications of changing patterns and levels of intra-industry trade.

The measurement of intra-industry trade between unequal partners

This note argues that the inadequacy of the GL index to correctly reflect the level of intra-industry trade in presence of trade imbalances may partly be due to measuring intra-industry trade between countries with large differences in economic size. Several adjustment procedures have been suggested in the literature but it is demonstrated that none of the alternative measures seem capable of eliminating the problem. A new measure of intra-industry trade is proposed in which the bilateral level of intra-industry trade is divided by the total number of products traded between two countries to yield an average level of intra-industry trade per product. This measure may also be applied at industry level, and in contrast to the GL index, it is highly correlated with the actual level of intra-industry trade.

Back to the future: Taking stock on intra-industry trade

Back to the Future: Taking Stock on Intra-Industry Trade. — This paper begins by examining the unresolved issues identified in an earlier analysis of the literature. It then sets out developments in theory, measurement, empirical analysis and policy. The progress made on each of these fronts is assessed and remaining unresolved issues identified. The paper argues that the last decade has seen very considerable progress in the measurement of intra-industry trade and in the way the empirical investigations are conducted. It also argues that on the modelling front considerable progress has been made in incorporating spatial and growth dimensions into the paradigm.

Intra-industry versus inter-industry trade: Relevance for adjustment costs

their path-breaking work, Grubel and Lloyd (1975) observed that intra-industry trade (IIT) is a high proportion of total trade among industrialised countries. This was not expected on the basis of existing theories of international trade. The Grubel and Lloyd work then led to the development of a number of theoretical explanations of HT (see Helpman and Krugman 1985 for a review). Apart from the challenge that Grubel and Lloyd provided to trade theorists, a second important implication of their work concerns adjustment costs. On this issue, Hamilton and Kniest (1991), Greenaway et al. (1994), and Brulhart (1994) suggest that adjustment costs associated with trade liberalisation depend on the extent of HT. If trade expansion is predominantly of the intra-industry variety, then adjustment costs are likely to be lower than if most of the expansion is inter-industry. Both streams of the literature (trade theory and adjustment costs) have used various measures of intra-industry or matched trade. If mentioned at all, measures of inter-industry or unmatched trade have been treated merely as a residual: the difference between a measure of total trade and the favoured measure of IIT. The focus on measures of IIT is appropriate for the first stream of the literature. However, when we are dealing with adjustment costs, the focus should be on the measure of inter-industry or unmatched trade. In the next section, we examine Briilhart's measures of matched changes in trade. These overcome various problems associated with earlier work by Hamilton and Kniest and Greenaway et al. We then suggest a measure of unmatched changes in trade (UMCIT) and argue that it is this measure, rather than measures of matched changes in trade, that is relevant for studies concerned with adjustment costs. We

On the measurement of intra-industry trade: Some further thoughts

Zur Messung des intra-industriellen Handels. Einige weitere Gedanken. — Der Autor untersucht, was fur und was gegen das Argument des Korrekturbedarfs bei der Messung des intra-industriellen Handels (IIH) spricht, und kommt zu dem Ergebnis, da\ eine Korrektur sowohl aus theoretischen als auch aus empirischen Grunden abzulehnen ist. Der unkorrigierte Index von Grubel und Lloyd hat sich als der beste der gegenwArtig verfugbaren Indizes erwiesen, wenn er auch ziemlich stark auf das Ausma\ der Datendisaggregierung reagiert. Empirische Studien scheinen darauf hinzudeuten, da\ die Ebene der 4- bis 5-stelligen SITC am besten geeignet ist, um den IIH zu messen. Selbst an Hand dieser stark disaggregierten Daten ist der auf bilateraler Basis berechnete IIH sehr beachtlich, besonders wenn er mit dem hier vorgeschlagenen neuen Index gemessen wird. Dieser Index wird aus theoretischen uberlegungen abgeleitet und ist nicht mit dem uberlappen des Handels verknupft.

THE RELATIONSHIP BETWEEN THE VARIATION IN PROTECTION WITHIN MANUFACTURING INDUSTRIES AND INTRA‐INDUSTRY TRADE IN KOREA: A PRELIMINARY ANALYSIS

THE RELATIONSHIP BETWEEN THE VARIATION IN PROTECTION WITHIN MANUFACTURING INDUSTRIES AND INTRA‐INDUSTRY TRADE IN KOREA: A PRELIMINARY ANALYSIS

Trade imbalance effects in the measurement of intra-industry trade

If intra-industry trade is measured at a particular level of disaggregation by the ratio of net trade to gross trade [Balassa, 1966], then the absence of overall trade balance or matching for the range of transactions under consideration means that exports cannot equal or match imports in every industry or grouping. Overall trade imbalance may induce bias therefore into the measurement of intra-industry trade. This bias is inevitably in a downward direction in the case of the summary index for the whole

The measurement of intra-industry trade when overall trade is imbalanced

The measurement of intra-industry trade when overall trade is imbalanced