Advanced Search
MyIDEAS: Login to save this paper or follow this series

How Important is Intra-Industry Trade in Australia's Rapid Trade Growth?

Contents:

Author Info

  • Jayant Menon
  • Peter B. Dixon

Abstract

Empirical work on intra-industry trade (IIT) is almost 30 years old. Initial research sought to identify if IIT was a significant share of total trade (TT). The Grubel-Lloyd (GL) index was widely used for this purpose, since it provides a relatively reliable measure of the importance of IIT at any point in time. Interest has since shifted to the changing importance of IIT over time, particularly with the emergence of regional trading blocks. Previous researchers have used movements in the GL index to infer the importance of IIT over time. This is not only vague, but can be misleading. In this paper, we show how to measure the contributions of net trade (NT) and IIT to the growth in TT. To understand changes in IIT over time, we also derive the contributions of imports and exports to the growth in TT, NT and IIT. All our formulas are illustrated with data for 205 Australian manufacturing industries defined at the 3- and 4-digit level of the SITC for the periods 1981 to 1986 and 1986 to 1991. The results show that while almost all the growth in TT was driven by NT between 1981 and 1986, IIT contributes almost half the sharp growth in TT between 1986 and 1991. The dominant contribution of NT between 1981 and 1986 was mainly a result of import growth, while the increase in the contribution of IIT between 1986 and 1991 was almost solely due to export growth.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.copsmodels.com/ftp/workpapr/g-110.pdf
File Function: Initial version, 1994-06
Download Restriction: no

File URL: http://www.copsmodels.com/elecpapr/g-110.htm
File Function: Local abstract: may link to additional material.
Download Restriction: no

Bibliographic Info

Paper provided by Victoria University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-110.

as in new window
Length:
Date of creation: Jun 1994
Date of revision:
Publication status: Published in Dixon, Menon and Rimmer(2000), 'Changes in Technology and Preferences: A General Equilibrium Explanation of Rapid Growth in Trade', Australian Economic Papers, Wiley Blackwell, vol. 39(1), pages 33-55, March.
Handle: RePEc:cop:wpaper:g-110

Contact details of provider:
Postal: PO Box 14428, Melbourne, Victoria, 8001
Phone: 03 9919 1877
Web page: http://www.copsmodels.com/about.htm
More information through EDIRC

Related research

Keywords:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Richard Harris, 1983. "Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition," Working Papers, Queen's University, Department of Economics 524, Queen's University, Department of Economics.
  2. Caves, Richard E, 1981. "Intra-Industry Trade and Market Structure in the Industrial Countries," Oxford Economic Papers, Oxford University Press, Oxford University Press, vol. 33(2), pages 203-23, July.
  3. Yung Chul Park & Won-Am Park, 1991. "Changing Japanese Trade Patterns and the East Asian NICs," NBER Chapters, National Bureau of Economic Research, Inc, in: Trade with Japan: Has the Door Opened Wider?, pages 85-120 National Bureau of Economic Research, Inc.
  4. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 89(5), pages 959-73, October.
  5. Finger, J M, 1975. "Trade Overlap and Intra-Industry Trade," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 13(4), pages 581-89, December.
  6. Greenaway, David & Milner, Chris R, 1983. "On the Measurement of Intra-Industry Trade," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 93(372), pages 900-908, December.
  7. Peter A. Petri, 1991. "Market Structure, Comparative Advantage, and Japanese Trade under the Strong Yen," NBER Chapters, National Bureau of Economic Research, Inc, in: Trade with Japan: Has the Door Opened Wider?, pages 51-84 National Bureau of Economic Research, Inc.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:cop:wpaper:g-110. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Horridge).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.