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Does East Asian Integration Keep Up with the European Pattern? Empirical Evidence from Intra-Industry Trade in Europe and East Asia

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  • Yoo-Duk Kang

Abstract

This paper examines development of inter/intra-industry trade in Europe and East Asia. In order to quantify the level of intra-industry trade (IIT), a biascorrected Grubel and Lloyd index is used. The finding is that IIT is more evident in intra-European trade than in intra-East Asian trade, while dynamics toward IIT have been increasingly more important in trade between East Asian economies. Vertical intra-industry trade and horizontal intra-industry trade are compared, and their share in intraregional trade in both regions is measured. The paper finds that IIT in East Asia is characterized by vertical intra-industry trade. In order to identify determinants of IIT in Europe and East Asia, a regression analysis is used, which finds that conventional determinants of IIT explain a large part of IIT in Europe, while they do not for East Asian countries. In East Asia, IIT takes place between developed countries in the region.

Suggested Citation

  • Yoo-Duk Kang, 2011. "Does East Asian Integration Keep Up with the European Pattern? Empirical Evidence from Intra-Industry Trade in Europe and East Asia," Asian Development Review (ADR), World Scientific Publishing Co. Pte. Ltd., vol. 28(02), pages 133-165, December.
    • Handle: RePEc:wsi:adrxxx:v:28:y:2011:i:02:n:s0116110511500132
    DOI: 10.1142/S0116110511500132
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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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