International Journal of Business and Social Science

ISSN 2219-1933 (Print), 2219-6021 (Online) DOI: 10.30845/ijbss

Intra Industry Trade Measurement: Then and Now - Towards A New Measure of Marginal Intra Industry Trade
Ranita Seecharan, Roger Hosein

Intra industry trade (IIT) measures have been extensively used in international trade research as tools for examining the trade overlap dimension of trade flows. Since the earliest contributions many refinements and extensions have been made to IIT measures, most significantly though was the formulation of dynamic indicators. This paper summarizes the empirical measures of IIT and traces the evolution of these indicators over the last five decades. Furthermore, this paper examines and documents the relative strengths and shortcomings of each of these indices following which a new measure of dynamic IIT is proposed. This index stems from the widely accepted Brulhart A construct and represents a more refined measure of IIT. Data for two more developed Caribbean countries are employed and the results reveal a similar trend for both measures over time, though the proposed index is markedly higher for all periods.

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