IDEAS home Printed from
   My bibliography  Save this article

An Analysis of Intra-Industry Trade between Japan, Malaysia and China


  • M. Affendy Arip

    () (Faculty of Economics and Business, Universiti Malaysia Sarawak)

  • Lau Sim Yee

    () (Faculty of Economics, Graduate School of International Economics and Business Administration, Reitaku Univeristy, Japan)

  • Madono Satoru

    () (Faculty of Economics, Graduate School of International Economics and Business Administration, Reitaku Univeristy, Japan)


This paper investigates the bilateral trade pattern between Japan, Malaysia and China (JMC) using the intra-industry trade (IIT) index analysis. Our empirical findings revealed the following. First, China shows a higher degree of IIT relation with Japan vis-à-vis Malaysia. Second, to the extent of whether rapid manufacturing development in China is affecting Malaysia’s export to Japan, our analytical evidence demonstrates that the degree of overlapping exports to Japan by Malaysia and China has increased over time. Although this trend appears to be an indication of increasing competition from China in relation to Malaysia’s products in the Japanese market, our empirical evidence – detailing the degree of product similarity between Malaysia and China using the unit value (UV) measurement – shows that both countries’ exports actually comprise mainly vertically differentiated products or different segments of the market in Japan. Nevertheless, the results also reveal that, compared to Malaysia, China is rapidly increasing its export share in horizontally differentiated products or similar market segments.

Suggested Citation

  • M. Affendy Arip & Lau Sim Yee & Madono Satoru, 2011. "An Analysis of Intra-Industry Trade between Japan, Malaysia and China," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 3(1), pages 1-30, April.
  • Handle: RePEc:umk:journl:v:3:y:2011:i:1:p:1-30

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Lionel Fontagné & Michael Freudenberg & Guillaume Gaulier, 2005. "Disentangling Horizontal and Vertical Intra-Industry Trade," Working Papers 2005-10, CEPII research center.
    2. Lionel Fontagné & Michaël Freudenberg, 1997. "Intra-Industry Trade: Methodological Issues Reconsidered," Working Papers 1997-01, CEPII research center.
    Full references (including those not matched with items on IDEAS)

    More about this item


    - Japan; Malaysia; China; intra-industry trade; SITC Rev.2; ISIC Rev.3;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L70 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - General


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:umk:journl:v:3:y:2011:i:1:p:1-30. 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: (Teoh Wern Jun). General contact details of provider: .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.