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Does East Asian Integration Keep Up with the European Pattern? Empirical Evidence from Intra-Industry Trade in Europe and East Asia

Yoo-Duk Kang
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Yoo-Duk Kang: Asian Development Bank,

Asian Development Review, 2011, vol. 28, issue 2, 133-165

Abstract: This paper examines development of inter/intra-industry trade in Europe and East Asia. In order to quantify the level of intra-industry trade (IIT), a biascorrected Grubel and Lloyd index is used. The finding is that IIT is more evident in intra-European trade than in intra-East Asian trade, while dynamics toward IIT have been increasingly more important in trade between East Asian economies. Vertical intra-industry trade and horizontal intra-industry trade are compared, and their share in intraregional trade in both regions is measured. The paper finds that IIT in East Asia is characterized by vertical intra-industry trade. In order to identify determinants of IIT in Europe and East Asia, a regression analysis is used, which finds that conventional determinants of IIT explain a large part of IIT in Europe, while they do not for East Asian countries. In East Asia, IIT takes place between developed countries in the region.

JEL-codes: F14 F15 (search for similar items in EconPapers)
Date: 2011
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