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Testing Intra-Industry Trade Between Portugal and Spain [1990-1996]

Author

Listed:
  • Horácio C. Faustino
  • J. R. Silva
  • Rita V. Carvalho

Abstract

This paper shows how, in the period 1990-1996, economic integration between the two Iberian economies has deepened through intra-industry trade. The enquiry was led at the level of the main forty traded products. In this context, several tests have been made. Our analysis combines first the application of the Grubel and Lloyd index of the main forty products and the marginal intra-industry trade of Brulhart, and Brulhart and Elliot. On the basis of these indexes we defined our criterion for the selection of the competitive cluster of Portugal throughout the period. We have also considered the global intra-industry trade, in nominal and real terms, according to the method of Greenaway et al. In econometric terms we have tried to know which is the relation between the intra-industry trade index and the marginal intra-industry trade at the level of the main forty products, the results however were not unequivocal. The same is true as far as concerns the relation between the intra-industry trade index and the net export position at the level of the same products. Despite the fact that some attempts have been inconclusive, knowledge about Iberian trade has developed in a field essential to its upgrading, and the way is open for further research.

Suggested Citation

  • Horácio C. Faustino & J. R. Silva & Rita V. Carvalho, 2000. "Testing Intra-Industry Trade Between Portugal and Spain [1990-1996]," Working Papers Department of Economics 2000/06, ISEG - Lisbon School of Economics and Management, Department of Economics, Universidade de Lisboa.
    • Handle: RePEc:ise:isegwp:wp62000
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    References listed on IDEAS

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    1. Marius Brülhart, 1998. "Trading Places: Industrial Specialization in the European Union," Journal of Common Market Studies, Wiley Blackwell, vol. 36(3), pages 319-346, September.
    2. Clive Hamilton & Paul Kniest, 1991. "Trade liberalisation, structural adjustment and intra-industry trade: A note," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 127(2), pages 356-367, June.
    3. David Greenaway & Robert Hine & Chris Milner & Robert Elliott, 1994. "Adjustment and the measurement of marginal intra-industry trade," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(2), pages 418-427, June.
    4. Marius Brülhart, 1994. "Marginal intra-industry trade: Measurement and relevance for the pattern of industrial adjustment," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 130(3), pages 600-613, September.
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    More about this item

    Keywords

    intra-industry trade; marginal intra-industry trade; competitive cluster; net export position.;
    All these keywords.

    JEL classification:

    • C2 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables
    • F1 - International Economics - - Trade

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