How important is intra-industry trade in trade growth?

Empirical work on intra-industry trade (IIT) is almost 30 years old. Initial research sought to identify if IIT was a significant share of total trade (TT). The Grubel-Lloyd (GL) index was widely used for this purpose. Interest has since shifted to the changing importance of IITover time. Using movements in the GL index to infer the importance of IIT over time is not only vague, but can be misleading. In this article, we measure the contributions of growth in net trade (NT) and IIT to the growth in TT. To understand changes in IIT over time, we also derive the contributions of imports and exports to the growth in TT, NT, and IIT. All our formulas are illustrated with data for 205 Australian manufacturing industries.     

Is the ASEAN Free Trade Area a Second Best Option?

This paper evaluates the ASEAN Free Trade Area (AFTA) which has been accepted as an ASEAN endeavour to be achieved by 2008 in the Singapore Summit in 1992. Noting the new circumstances and environment which have prompted a more proactive strategy of economic integration, the paper first surveys empirical studies on the economic impact of complete trade liberalisation. The consensus is that AFTA would not have a substantial impact in increasing intra-ASEAN trade. This suggests that AFTA, like previous ASEAN efforts at economic cooperation, seems more a political than economic effort. The inherent lack of complementarity in trade remains though the ASEAN countries' industrial structures have become more competitive and complementary. The paper however concludes that AFTA would still be useful as a demonstration of ASEAN solidarity and commitment especially if supplemented by other measures such as more deregulation and cross-country investment and other exchanges of factors like technology and human resource development.     

The impact of AFTA on intra-AFTA trade

ASEAN countries have liberalised intra-ASEAN trade over the last 20 years by establishing the ASEAN Free Trade Area (AFTA). This paper aims to examine the impact of trade liberalisation under AFTA on intra-ASEAN trade. By applying a gravity model, we find positive and significant trade creation effects from the tariff elimination for a wide range of products. In addition, the analysis reveals that the elasticity of tariff reduction on imports tends to be much larger than that on exports. Trade creation effects for the new ASEAN members are relatively small compared to those for the old members. Our results show that AFTA has been successful in promoting intra-AFTA trade, while we argue that further expansion may be achieved by increasing the use of AFTA and by reducing/removing non-tariff measures (NTMs) through such ways as improving customs procedures and harmonizing/mutually recognizing product standards.     

INDONESIAN TRADE LIBERALISATION: ESTIMATING THE GAINS

Indonesia has undergone comprehensive trade liberalisation by participating in multilateral and regional trade arrangements and by conducting unilateral liberalisation. This paper evaluates the different paths of liberalisation the country has followed, and measures their effects on the economy. It considers the impact of several liberalisation scenarios: unilateral liberalisation; regional liberalisation through APEC (Asia Pacific Economic Cooperation) and AFTA (the ASEAN Free Trade Area); and multilateral trade liberalisation through the Uruguay Round (UR). The results show that the full implementation of UR and APEC liberalisation would greatly benefit Indonesia, and that unilateral liberalisation, carried out in conjunction with the UR commitment, would lead to large welfare gains. On the other hand, the creation of AFTA is expected to add little to welfare in Indonesia or in the other ASEAN member countries.     

Intra-industry trade of India: Trends and country-specific factors

Intra-industry Trade of India: Trends and Country-Specific Factors. — The analysis in this paper confirms that trade liberalization biases trade expansion towards intra-industry trade (IIT) in India. The increased level of IIT is largely exportled, that is, caused by a faster growth of exports than of imports. India’s IIT is more intense with high-income countries and is characterized by a greater extent of complementarity. Further, certain country-specific factors which are found to be crucial in the models of vertical IIT are pertinent in influencing the pattern of India’s bilateral IIT.     

On the Measurement of Product Quality in Intra-Industry Trade

The world has witnessed a dramatic increase in trade over the last forty years. Much of this growth in trade is intra-industry in nature. A relatively recent development in the intra-industry trade (IIT) literature is the measurement of the simultaneous import and export of quality-differentiated products, commonly known as vertical and horizontal IIT. In this paper we compare the Greenaway, Hine and Milner (1994) and Fontagné and Freudenberg (1997) approaches to disentangling vertical and horizontal intra-industry trade and examine some of the implications of employing simple ratios to define the boundary between product quality types. We present a complementary approach based on the traditional Grubel and Lloyd (GL) index and demonstrate with numerical examples its versatility and applicability at the product level. JEL no. F19     

“金砖四国”产业内贸易的经济效应分析

文章利用加权产业内贸易指标、产业内贸易与贸易额和GDP之间的相关关系对＂金砖四国＂产业内贸易的经济效应进行实证分析。结果显示推动四国贸易的主要是产业间贸易,中国与印度产业内贸易总体水平最高,但中国与巴西的贸易额对加权产业内贸易指数的弹性系数最大,中国与俄罗斯双边产业内贸易对推动两国GDP的作用最为突出。     

Patterns and determinants of intra-industry trade in Asia

Intra-industry trade (IIT) has gained in importance across Asia as a result of the rapid growth of Asian economies and their key role in the international fragmentation of production. This paper examines the level of IIT for 22 countries in East, Southeast, South, and Central Asia in 2003. IIT is measured as a multilateral trade-weighted index and is reported for ten different categories of goods in the primary and secondary sectors. In addition, the determinants of IIT are investigated using a Tobit regression model. The results indicate that ASEAN and the high-income countries in East Asia exhibit the highest levels of IIT, followed closely by China and India. R&D spending, openness, and a higher share of manufactured exports were found to promote IIT, while geographical distance and the difference in economic size had an adverse effect, especially for manufactured goods. The ASEAN free trade area was most prominently associated with IIT across all SITC categories. Central and South Asian regional trade agreements had a positive influence on IIT in primary products.     

AFTA and the Asian Crisis: Help or Hindrance to ASEAN Intra‐Regional Trade?

Using a modified gravity equation, this paper examines ASEAN intra- and extra-regional bias in bilateral trade flows and how these relationships have altered over time. We pay particular attention to the periods before and after the signing of AFTA as well as the crucial years prior to and following the Asian crisis. Given the 'openness' of ASEAN countries we consider not only intra-ASEAN trade but also the effect of AFTA on non-members. We find that trade flows were not significantly affected in the years immediately following the signing of the AFTA agreement and also that the traditional stance of ASEAN countries to outward-oriented economic activity has not been significantly damaged but rather stimulated by the AFTA process and/or the Asian economic crisis. We do find, however, that that one effect of the Asian economic crisis was to generate a stronger desire to source imports from within the region.     

中国与东盟产业内贸易现状与动因分析

本文运用综合产业内贸易指数(G&L指数)对中国与东盟近11年来的大量贸易资料进行分析。指出中国和东盟间的贸易增长主要是来自于产业内贸易的增长,并分析了中国和东盟五国产业内贸易发展的动因,提出了加强组建中国—东盟自由贸易区的重要意义,并提出了相关意见和建议。     

Integration and intra-industry trade adjustment in South Africa

This article analyses intra-industry trade adjustment by the Southern African Customs Union after 1994, and links between trade liberalisation and employment are examined. The traditional Grubel-Lloyd index is complemented by marginal inter- and intra-industry trade measures, and trade expansion of sectors is scaled, related to change in total exports and imports. In three different empirical approaches, large differences are found: in the level of intra-industry trade (IIT) between different sectors (categorised into resource-based, labour-intensive, scale-intensive and differentiated industries); in the level of IIT of individual sectors in trade with the SADC6, the European Union and the rest of the world; and in the economic significance of trade expansion for different industries and with different trading partners. Trade expansion is dominated by differentiated and scale-intensive industries, indicating that the main economic gain of international integration is found in the opportunity to exploit economies of scale in a larger market. IIT and marginal IIT are positively related to increases in labour productivity, and negatively related to employment change. Interindustry trade and both export and import expansions are positively related to employment gain, but only export is positively related to increased labour productivity.     

中日钢铁产业内贸易及影响因素实证分析

为了研究中日间钢铁产业内贸易及其主要影响因素,首先,选用相关指数和方法对1990～2009年两国钢铁产业内贸易水平进行分类测量发现,中日钢铁总体产业内贸易水平呈波浪形增长,产业内贸易模式以垂直型产业内贸易为主;其次,运用时间序列分析对总体产业内贸易、水平型和垂直型产业内贸易与各影响因素分别进行了协整检验和Granger因果检验,在实证结论基础上文章提出重点应在优化出口产品结构、提高市场集中度、提高自主创新能力等方面努力。     

The Skill Content of Inter- and Intra-Industry Trade: Evidence for the United Kingdom

In this paper we investigate the relative importance of net exchanges of skills embodied in intra-industry and inter-industry trade for the UK’s trade with some middle income countries. We also separately measure the net exchanges of skills embodied in vertical and horizontal intra-industry trade (IIT). We find that there are substantial factor exchanges involved in IIT, implying that traditional factor content studies may have seriously underestimated the actual factor content of total trade flows. This means that the adjustment effects of IIT may be greater than is often presumed. We also find, in line with theory, that vertical IIT involves similar net exchanges of labour of different skills to that of inter-industry trade, while horizontal IIT involves much smaller net exchanges of skills. JEL no. F11, F14     

Does Immigration Help to Explain Intra-Industry Trade? Evidence for Spain

This paper argues and provides evidence that the stock of immigrants in a country has a positive effect on the share of its bilateral intra-industry trade (IIT). The paper links the literatures about immigration and trade and about IIT determinants. The key is that immigration contributes to trade transaction costs reduction and this would benefit the trade in differentiated products, i.e. IIT, more than the trade in homogeneous products, i.e. inter-industry trade. We test this hypothesis using Spanish data and departing from the models developed by Helpman. Results are robust to different IIT measures, estimation methods and specifications. JEL no. F10, F22, F14     

Trade liberalisation,structural adjustment and intra-industry trade: A note

Conclusions This note reports tests of the relationship between trade liberalisation and the levels of intra-industry trade, and between levels of IIT and structural adjustment in response to trade liberalisation. It has used a new approach by focussing on the impact of changes in protection on (i) changes in IIT, and (ii) differences in structural adjustment over time in high-IIT and low-IIT sectors.     

Chinese Bilateral Intra-Industry Trade: A Panel Data Study for 50 Countries in the 1992–2001 Period

This study examines the features and determinants of Chinese intra-industry trade during the 1992–2001 transition period for 50 of China’s trade partners. We disentangle total intra-industry trade (TIIT) into vertical intra-industry trade (VIIT) vis-à-vis horizontal intra-industry trade (HIIT), using data at the four-digit SITC level. The findings indicate that Chinese bilateral intra-industry trade, particularly VIIT, increased significantly during this transition period. VIIT appears to be positively related to differences in consumer patterns. HIIT is negatively related to these differences. In addition, we find that FDI has played an important role in determining IIT, especially VIIT. Other significant intra-industry trade drivers are geographical distance, economic size, trade openness and trade composition. Finally, the impact of China’s liberalization policies and the special role of Hong Kong are demonstrated. We discuss a number of important business and political implications that can be drawn from our findings. JEL no. F14     

产业内贸易、产业结构差异与中美贸易摩擦——与中日贸易摩擦的比较分析

本文通过对1995~2009年间中美、中日制造业产业内贸易进行统计上的比较,结合中美、中日贸易摩擦的状况,进一步证实产业内贸易水平与贸易摩擦之间的反向关系。产业结构的差异对中美、中日制造业产业内贸易发展有较大的影响,实证结果表明,人均消费差异、产业规模差异以及经济外向度差异与两者产业内贸易呈负相关,而对华FDI与两者产业内贸易呈正相关,但影响的强弱则大有区别。只有缩小中美两国之间的产业结构差异,才能有效提高中美产业内贸易水平,并逐步减少中美贸易摩擦。     

The ASEAN Free Trade Area: Implications for Indonesia's Imports

The Singapore Declaration of 1992, announcing the establishment of an ASEAN Free Trade Area (AFTA), effectively brings down tariff levels on intra-ASEAN trade to 0–5% by the year 2008. This paper estimates the changes in Inonesia's imports that will result from trade creation generated by AFTA. Our results show that Indonesia's imports from other ASEAN partners will increase by 6%, based on 1990 figures. This is far greater than the estimated effects of the existing PTA scheme. However, these results are upper- bound estimates and include only static changes.     

国家特征视角下中国产业内贸易决定因素实证研究——基于2000～2007年面板数据的分析

本文首先运用边际产业内贸易指数对2000～2007年中国的总体、水平型和垂直型产业内贸易水平分别加以测度,然后运用面板数据从国家特征角度对产业内贸易决定因素进行跨时期实证研究。结果表明:经济规模、外商直接投资和贸易不平衡是影响我国产业内贸易的主要国家特征因素,其中,经济规模与我国产业内贸易尤其是水平型产业内贸易呈正相关,且显著性有增强趋势;外商直接投与我国产业内贸易呈负相关,且影响程度有减弱趋势;贸易不平衡与我国总体、水平型和垂直型产业内贸易都呈明显负相关,且影响程度有增强趋势。另外,地理位置和政治文化因素对我国产业内贸易发展也有不容忽视的影响。     

Intra-industry trade — An in-depth study of Swedish liquid pump trade

Intra-Industry Trade — An In-Depth Study of Swedish Liquid Pump Trade. - The issue of intra-industry trade is here investigated through an in-depth case study of Swedish trade in pumps. A questionnaire was made in order to give detailed information about the trade flows. The survey indicates that the share of “true” IIT in Sweden's centrifugal pump trade in 1990 was about 10 percent. This part of the apparent IIT could not be attributed to “categorical aggregation”. The survey revealed twelve different causes of IIT. A large share of IIT was due to re-exports (= vertical IIT). Behavioural and institutional factors were the main explanations of the non-re-exports IIT (= horizontal IIT).