Modified Grubel-Lloyd Index: Intra-industry Trade and Intra-regional Trade in East Asia

Tri Widodo ()

MPRA Paper from University Library of Munich, Germany

Abstract: Intra-industry trade (IIT) has increased significantly in the world trade. Meanwhile, intra-regional trade has also risen in parallel with the proliferation of regional economic integrations. One of the prominent empirical tools widely employed to analyze IIT is the Grubel-Lloyd index (Grubel and Lloyd [1975]). This paper aims to examine the intra-industry trade in the intra-regional trade in East Asia. Firstly, we modify the Grubel-Lloyd index by considering intra- and inter-regional trade. Secondly, the modified index is then applied to investigate IIT in East Asia. We find that the intra-industry trade has increased significantly in the region. The increases are greater in the intra-regional trade than in the inter-regional trade. The inter-industry trade of Japan and Indonesia is still dominant in both intra- and inter-regional trade. In contrast, in the case of the Philippines, its intra-industry trade has overtaken the inter-industry trade in both intra- and inter-regional trade.

Keywords: intra-industry trade; intra-regional trade; Grubel-Lloyd index (search for similar items in EconPapers)
JEL-codes: F10 F14 F17 (search for similar items in EconPapers)
Date: 2009-01-11
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Citations: View citations in EconPapers (1)

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