How Reliable are Intra-Industry Trade Measures as Indicators of Adjustment Costs?
A number of recent papers have examined measures of intra-industry trade (IIT) and related indicators such as matched and unmatched changes in trade (MCIT and UCIT) as indicators of adjustment costs associated with trade expansion or contraction. We make three contributions to this literature. First, we clarify what is meant by adjustment costs in the context of these IIT-related measures. Second, we present new measures of MCIT and UCIT. Third, we compare our measures with existing measures using some simple numerical examples and data on Irish chemicals trade. We find that previous IIT-related measures tend to overestimate the extent of MCIT, and underestimate UCIT. We also find that the extent of the bias in these measures can be substantial. Thus, they are unreliable as indicators of adjustment costs. Our measures overcome these limitations.
|Date of creation:||Mar 1996|
|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
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.:
- Dixon, Peter B & Menon, Jayant, 1997.
"Measures of Intra-industry Trade as Indicators of Factor Market Disruption,"
The Economic Record,
The Economic Society of Australia, vol. 73(222), pages 233-237, September.
- Peter B. Dixon & Jayant Menon,, "undated". "Measures of Intra-Industry Trade as Indicators of Factor Market Disruption," Discussion Papers 95/15, University of Nottingham, CREDIT.
- Peter B. Dixon & Jayant Menon, 1995. "Measures of Intra-Industry Trade as Indicators for Factor Market Disruption," Centre of Policy Studies/IMPACT Centre Working Papers g-113, Victoria University, Centre of Policy Studies/IMPACT Centre.
- Marius Brülhart, 1994. "Marginal intra-industry trade: Measurement and relevance for the pattern of industrial adjustment," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(3), pages 600-613, September.
- Jayant Menon & Peter B. Dixon,, "undated". "Regional Trading Agreements and Intra-Industry Trade," Discussion Papers 95/14, University of Nottingham, CREDIT.
- Clive Hamilton & Paul Kniest, 1991. "Trade liberalisation, structural adjustment and intra-industry trade: A note," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 127(2), pages 356-367, June.
- Greenaway, David & Milner, Chris R, 1983. "On the Measurement of Intra-Industry Trade," Economic Journal, Royal Economic Society, vol. 93(372), pages 900-908, December.
- Jayant Menon & Peter Dixon, 1996. "How important is intra-industry trade in trade growth?," Open Economies Review, Springer, vol. 7(2), pages 161-175, April. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:cop:wpaper:g-119. 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.