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Modified Grubel-Lloyd Index: Intra-industry Trade and Intra-regional Trade in East Asia

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  • Widodo, Tri

Abstract

Intra-industry trade (IIT) has increased significantly in the world trade. Meanwhile, intra-regional trade has also risen in parallel with the proliferation of regional economic integrations. One of the prominent empirical tools widely employed to analyze IIT is the Grubel-Lloyd index (Grubel and Lloyd [1975]). This paper aims to examine the intra-industry trade in the intra-regional trade in East Asia. Firstly, we modify the Grubel-Lloyd index by considering intra- and inter-regional trade. Secondly, the modified index is then applied to investigate IIT in East Asia. We find that the intra-industry trade has increased significantly in the region. The increases are greater in the intra-regional trade than in the inter-regional trade. The inter-industry trade of Japan and Indonesia is still dominant in both intra- and inter-regional trade. In contrast, in the case of the Philippines, its intra-industry trade has overtaken the inter-industry trade in both intra- and inter-regional trade.

Suggested Citation

  • Widodo, Tri, 2009. "Modified Grubel-Lloyd Index: Intra-industry Trade and Intra-regional Trade in East Asia," MPRA Paper 77992, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:77992
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    References listed on IDEAS

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    Cited by:

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    Keywords

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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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