Static and dynamic measurement of intra-industry trade and adjustment: A geometric reappraisal

Abstract

The principal analytical device used is an industry "trade box" that allows the authors to geometrically examine changes in intra-industry trade (ITT), total trade (TT), net trade (NT) and the Grubel and Lloyd (GL) index as a result of movements in trade points. The authors propose an approach to measure changes in both the absolute and relative values of ITT and NT with respect to changes in TT. Their methodology highlights a number of weaknesses with the existing literature on marginal ITT and provides a methodology that can be applied to investigate adjustment implications of changing patterns and levels of intra-industry trade.