Testing Intra-Industry Trade Between Portugal and Spain [1990-1996]

Horácio Faustino (), Joaquim Silva and Rita V. Carvalho

No 2000/06, Working Papers Department of Economics from ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa

Abstract: This paper shows how, in the period 1990-1996, economic integration between the two Iberian economies has deepened through intra-industry trade. The enquiry was led at the level of the main forty traded products. In this context, several tests have been made. Our analysis combines first the application of the Grubel and Lloyd index of the main forty products and the marginal intra-industry trade of Brulhart, and Brulhart and Elliot. On the basis of these indexes we defined our criterion for the selection of the competitive cluster of Portugal throughout the period. We have also considered the global intra-industry trade, in nominal and real terms, according to the method of Greenaway et al. In econometric terms we have tried to know which is the relation between the intra-industry trade index and the marginal intra-industry trade at the level of the main forty products, the results however were not unequivocal. The same is true as far as concerns the relation between the intra-industry trade index and the net export position at the level of the same products. Despite the fact that some attempts have been inconclusive, knowledge about Iberian trade has developed in a field essential to its upgrading, and the way is open for further research.

Keywords: intra-industry trade; marginal intra-industry trade; competitive cluster; net export position. (search for similar items in EconPapers)
JEL-codes: C2 F1 (search for similar items in EconPapers)
Date: 2000
New Economics Papers: this item is included in nep-his
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