INTRA-INDUSTY TRADE ANALYSIS OF OUTSTANDING COUNTRIES IN GLOBAL CLOTHING EXPORT WITH THE GRUBEL- LLOYD INDEX

Abstract

Author(s): Serdar ZZEN

The aim of this study is to determine the level of intra-industry trade of China, Bangladesh, Vietnam, Italy, Germany, India, and Turkey, which have respectively the highest shares in global clothing export. While there are several studies on intra-industry trade regarding the clothing sector in the literature, there have been mostly SITC 2-digit calculations on main sectors in many of these studies whereas there have been also studies on SITC 3-digit sub-sectors. Our study aims to discuss the most outstanding 7 countries in terms of intra-industry trade, SITC 2 and 3-digit sectors and global clothing sector in a comprehensive and detailed manner as well as providing an exhaustive study for the literature. Grubel- Lloyd Index was used in order to measure intra-industry trade. The index values of intra-industry were calculated for the 2000-2017 period and on the basis of SITC 2 and 3-digit sub-sectors.

According to the result of the Grubel Llyod Index, clothing foreign trade takes the form inter-industry trade for the five other countries except Germany and Italy on SITC 2-digit main sector basis. It was also observed that the index values of intra-industry trade of the five outstanding countries regarding global clothing export, except for Bangladesh and Vietnam, had an upward trend on SITC 2- digit main sector. On the basis of SITC 3-digit sub-sector, these following activities on foreign trade take the form of inter-industry trade: all the 3-digit sub-sectors for China, India, and Bangladesh; all the sub-sectors except for SITC 846 “Clothing accessories, of textile fabrics (socks, napkins, gloves etc.) and SITC 848 “Articles of apparel, clothing access., excluding textile such as hats etc.” for Vietnam, and except for SITC 848 “Articles of apparel, clothing access., excluding textile such as hats etc.” for Turkey. Moreover, the foreign trade activities of Germany and Italy take the form of intra-industry trade in all of the 3-digit sub-sectors. It was concluded that the index values of intra-industry trade for Vietnam, Germany, India and Turkey had an upward trend in all the 3-digit sub-sectors. Moreover, it was found out that China, except for SITC 846 “Clothing accessories, of textile fabrics (socks, napkins, gloves etc.)” and Italy, except for SITC 843 “Men's or boy's clothing, of textile, knitted, crochet” and SITC 848 “Articles of apparel, clothing access, excluding textile such as hats etc.” had an upward trend in all of the 3-digit sub-sectors in terms of index values of intra-industry trade whereas Bangladesh had a downward trend in all of the 3-digit sub-sector groups other than SITC 846 “Clothing accessories, of textile fabrics (socks, napkins, gloves etc.)” and SITC 848 “Articles of apparel, clothing access., excluding textile such as hats etc.” in terms of index values of intra-industry trade.

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