The Empirical Measurement of Intra‐Industry Trade*

Dissecting intra-industry trade

“…The mass in the center of the Chinese distribution has noticeably increased over the last decade, much like the evolution for the U.S. in the 1970s. The low importance of intra-industry trade for Japan in the 1960s was already noted by Grubel and Lloyd (1971), but it is surprising that this has persisted to this date. It is especially remarkable that an emerging economy as China now has more industries with balanced trade.…”

“…As noted by Grubel and Lloyd (1971), the fraction of trade deemed intra-industry depends crucially on one's definition of an industry. 6 Fig.…”

“…The index originally proposed by Balassa (1966) is still the most widely used. Trade overlap in industry i is measured by Grubel and Lloyd (1971) proposed to use total trade shares as weight to construct an aggregate index. Several adjustments have been proposed as the aggregate index is biased downward if aggregate trade is imbalanced.…”

Measuring vertical and horizontal intra-industry trade: the case for Turkey

“…One is due to Grubel and Lloyd (1971) (GL) and the other, to Fontagné and Freudenberg (1997) (FF). The GL approach is based on measuring the trade overlap for a given industry.…”

Preferential trade agreements and the structure of international trade

“…Santos and Tenreyro (2006) have proposed a Poisson Pseudo Maximum Likelihood estimation technique which is consistent in the presence of heteroscedasticity and also provides a natural way of dealing with zero observations. 15 See Lloyd (1971 and1975). 16 The measures of IIT are calculated at the four-digit level.…”