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Marginal Intra-Industry Trade: Measurement and Relevance

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  • Marius Brülhart

Abstract

The presence of high and growing levels of intra-industry trade (IIT) is commonly interpreted as a reason to expect low adjustment costs following trade liberalisation. This paper argues that trade-induced adjustment pressures are not directly related to the level of static IIT but to the structure of change in trade flows. The main aspect of this structure is the proportion of marginal intra-industry trade (MIIT). It is argued that none of the measures of MIIT used to date are entirely satisfactory. Three complimentary measures are thus suggested. The "A" index captures MIIT while preserving the statistical and presentational advantages of the Grubel-Lloyd index of IIT. The "B" index of IIT is related to MIIT as well as to sectoral trade performance, which is particularly relevant for one-country studies. The "C" measure serves to scale MIIT relative to other variables, such as gross trade flows or employment. A numerical example is appended, illustrating the properties of the various measures.

Suggested Citation

  • Marius Brülhart, 1994. "Marginal Intra-Industry Trade: Measurement and Relevance," Economics Technical Papers 942, Trinity College Dublin, Department of Economics.
  • Handle: RePEc:tcd:tcduet:942
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    Citations

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    Cited by:

    1. Abdul Azhar & Robert Elliott, 2003. "On the measurement of trade-induced adjustment," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 139(3), pages 419-439, September.
    2. Choorikkad Veermani, 2004. "Trade liberalisation, multinational involvement, and intra-industry trade in manufacturing," Indian Council for Research on International Economic Relations, New Delhi Working Papers 143, Indian Council for Research on International Economic Relations, New Delhi, India.
    3. Jámbor, Attila, 2010. "A csatlakozás hatása a mezőgazdasági termékek ágazaton belüli kereskedelmére Magyarország és az Európai Unió között
      [The effect of accession on intra-sectoral trade in agricultural products between
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 898-916.
    4. Bojnec, Stefan & Ferto, Imre, 2016. "Patterns and Drivers of the Agri-Food Intra-Industry Trade of European Union Countries," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 19(2).
    5. Fertő, Imre, 2006. "A társulási szerződés alkalmazkodási költségei a magyar élelmiszeriparban
      [The adjustment cost of the Association Agreement in the Hungarian food industry]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 799-811.
    6. Veronika CHALA, 2015. "The peculiarities of trade specialization in creative industries in the Central and Eastern European countries," Eastern Journal of European Studies, Centre for European Studies, Alexandru Ioan Cuza University, vol. 6, pages 91-109, June.
    7. Éltető, Andrea, 2003. "Versenyképesség a közép-kelet-európai külkereskedelemben
      [Competitiveness in Central and Eastern European foreign trade]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(3), pages 269-281.
    8. R J R Elliott & J Lindley, 2003. "Trade, Skills and Adjustment Costs: A Study of Intra-Sectoral Labour Mobility in the UK," The School of Economics Discussion Paper Series 0312, Economics, The University of Manchester.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General

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