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Sagot :
Index-intra industry trade, is the calculation that tells us the proportion of trade in each product involving both imports and exports.
What is Index intra industry trade?
Index intra industry trade refers to the exchange of similar product to the same industry. This term is generally used in International Trade. The examples of this trade include automobiles, beverages, food stuffs, computers and minerals. Countries that engage in Intra industry trade have larger economies of scale.
The Grubel- Lloyd index measures intra industry trade of a particular product. Intra industry trade is the process of exporting and importing products which are essentially the same product. The intra industry trade model was given by Krugman. About 60% in US and 60% in European trade are involved in intra industry trade. Costumers benefit from intra industry trade as they get a larger variety of products. I also help in product differentiation in the same industry. The causes for intra industry trade are
- Economies of Scale
- Competition
- Variety
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