Adjustment and the measurement of marginal intra-industry trade

Marginal intra-industry trade: Measurement and relevance for the pattern of industrial adjustment

“…This measure eliminates the first shortcoming of simple GL-index comparison by examining the structure of the change in trading patterns. However, Greenaway et al [1994] have highlighted that the fact of the HK index being undefined when either X or M has decreased, can lead to a non-random omission of a significant number of statistical observations and therefore to potentially misleading results. 6 Furthermore, Hamilton and Kniest [1991] have interpreted any situation where their index is undefined as representing "an increase in exports and a decrease in imports (or vice versa), which indicates inter-industry trade".…”

“…It is inferior to the latter in that it says nothing about the proportion of (marginal) intra-relative to inter-industry trade and it lacks the presentational appeal of a simple index contained between, say, 0 and 1. Hence, its raison d'etre rests upon the fact that "it can be related to corresponding levels of gross trade or real output in the context of any analysis of adjustment problems" [Greenaway et al, 1994].…”

“…As Greenaway et al [1994] have noted, "when we think about adjustment we are thinking about the implications of changes in the pattern of specialisation, not changes in the shares of exports and imports in increased trade". It is only by relating measures of the composition of trade to variables such as initial gross trade or production that they can be interpreted as valid indicators of structural change.…”

“…Alternatively, a method analogous to the one proposed by Greenaway et al [1994] could be applied. Thus, the absolute values of MIIT, representing matching changes in trade flows, yield the following mea-…”

Economic Integration and the Evolution of Trade: A Geometric Interpretation of Trade Measures

“…In relation to previous studies of IIT perhaps the most important observation is the large number of products that changed from a net import status to a net exporter or visa versa during the ten-year period. This has implications for the recent measures of marginal intra-industry trade (Brulhart 1994, Greenaway et al 1994. Over 26 percent of products switched net trading position.…”