IDEAS home Printed from https://ideas.repec.org/a/idn/journl/v1y2019isp5p511-530.html
   My bibliography  Save this article

Intra-Industry Trade Between India And Indonesia

Author

Listed:
  • C.T. Vidya

    (Centre for Economic and Social Studies, Hyderabad)

  • K.P. Prabheesh

    (Indian Institute of Technology)

Abstract

This paper analyzes the determinants of India’s Intra-Industry Trade (IIT) with its trading partner, Indonesia, from 1995 to 2017. We estimate India’s IIT with Indonesia using bilateral commodity trade data at the two-digit Broad Economic Categories classification code level. Our estimates of IIT demonstrate that India’s trade with Indonesia is indeed intra-industry in nature. However, no remarkable improvements in the intensity of IIT is found. We also examine the determinants of IIT by estimating a standard IIT equation using an autoregressive distributed lag model. Our empirical findings reveal that trade imbalances, disparity in the demand structure, and the human capital endowments among the countries reduce bilateral IIT and that foreign direct investment and trade openness play an important role in enhancing it. This study therefore suggests relevant policy interventions to facilitate fair trade by reducing barriers.

Suggested Citation

  • C.T. Vidya & K.P. Prabheesh, 2019. "Intra-Industry Trade Between India And Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 21(12th BMEB), pages 511-530, January.
    • Handle: RePEc:idn:journl:v:1:y:2019:i:sp5:p:511-530
    DOI: https://doi.org/10.21098/bemp.v0i0.978
    as

    Download full text from publisher

    File URL: https://bulletin.bmeb-bi.org/cgi/viewcontent.cgi?article=1100&context=bmeb
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.21098/bemp.v0i0.978?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Intra-industry Trade; Grubel–Lloyd Index; Autoregressive Distributed Lag Model;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:idn:journl:v:1:y:2019:i:sp5:p:511-530. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Lutzardo Tobing or Jimmy Kathon (email available below). General contact details of provider: https://edirc.repec.org/data/bigovid.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.