Hi, I need these questions answered. Please use these formulas:
Calculate intra-industry trade (IIT) for each product category using the formula in the text.
Calculate intra-industry trade share of one individual product in each product category using the formula in the text.
Explain the degree of intra-industry trade of selected individual product in each category (in other words, how much is intra-industry trade of selected individual product) in selected country.
Sources that can be used:
Slide 8 and 9 for formula
Selected Country’s Trade Statistics
Major Trade partner’s (Five Country) Trade Statistics
This video
helps explain the calculation.
How Important is Intra-Industry Trade?
The relative importance of IIT as a share of total trade in the product can be expressed as:
TIT IIT share = (X + M) – |X-M| / (X+M)
IIT is more important for trade in manufactured products than it is for trade in agricultural products.
Measuring Intra-Industry Trade
IIT is the part of total trade in the product (exports plus imports) that is not net trade.
(IIT) = (X + M) – |X-M| where X is the value of exports and M is the value of imports of the product.
Intra-industry trade for a product is equivalent to twice the value of the smaller of exports or imports.
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