Regional Trading Arrangements and Intra-industry Trade: The Case of ANZCERTA

摘要: Empirical work on intra-industry trade (IIT) is almost 30 years old. From the earliest analyses of IIT, phenomenon has been associated with Regional Trading Agreements (RTAs). An important motivation for this research issue adjustment costs; if most growth in resulting from RTA attributable to then resource re-allocation costs short medium term are likely be lower. This because IIT does not require inter-industry factor movements. In attempting determine whether RTAs increases previous researchers have looked at two questions: (i) increased following formation RTA, and (ii) more intra versus extra trade. To answer first question, used movements value Grubel Lloyd (1975, GL) index over time, while second dealt by comparing GL Employing these ways questions can lead error. paper, we develop a new methodology analysing both which overcomes problems using index. First, derive formula decomposes total (TT) into contributions net (NT). Second, show how measure country's multilateral NT. The focus our study effects Australia-New Zealand Closer Economic Relations Agreement (ANZCERTA) Australian New All formulas computed data 130 manufacturing industries defined 3-digit level Standard International Trade Classification (SITC) periods 1981 1986 1991.