Trade Liberalisation and Adjustment: How Important is Intra-Industry Trade?

Rodney Thom and M. McDowell

Working Papers from College Dublin, Department of Political Economy-

Abstract: This paper focuses on the appropriate measurement of intra-industry trade as indicator of structural adjustment costs. Vertical intra-industry trade is distinguished from horizontal trade on the basis of industrial organisation rather than quality differences. It is argued that existing dynamic versions of the Grubel-Lloyd index reflect horizontal trade only and classify vertical intra-industry trade with inter-industry trade. The paper then proposes a method to distinguish between horizontal and vertical trade and applies these techniques to emerging trade between the EU and the economies of Central and Eastern Europe.

Keywords: TRADE LIBERALIZATION; INDUSTRIAL STRUCTURE (search for similar items in EconPapers)
JEL-codes: F1 F2 (search for similar items in EconPapers)
Pages: 17 pages
Date: 1998
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:fth:dublec:98/6

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