The Grubel–Lloyd index measures
intra-industry trade
Intra-industry trade refers to the exchange of similar products belonging to the same industry. The term is usually applied to international trade, where the same types of goods or services are both imported and exported.
Examples
Examples of this ...
of a particular product. It was introduced by
Herb Grubel and
Peter Lloyd in 1971.
where ''X
i'' denotes the
export
An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an ...
, ''M
i'' the
import of good ''i''.
If ''GL
i'' = 1, there is a good level of intra-industry trade. This means for example the Country in consideration Exports the same quantity of good ''i'' as much as it Imports. Conversely, if ''GL
i'' = 0, there is no intra-industry trade at all. This would mean that the Country in consideration only either Exports or only Imports good ''i''.
References
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International trade theory
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