Grubel–Lloyd index

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The Grubel–Lloyd index measures intra-industry trade of a particular product. It was introduced by Herb Grubel and Peter Lloyd in 1971.

$GL_{i}={\dfrac {(X_{i}+M_{i})-\left|X_{i}-M_{i}\right|}{X_{i}+M_{i}}}=1-{\dfrac {\left|X_{i}-M_{i}\right|}{X_{i}+M_{i}}}\qquad ;\ 0\leq GL_{i}\leq 1$

where X_i denotes the export, M_i the import of good i.

If GL_i = 1, there is only intra-industry trade, no inter-industry trade. This means for example the Country in consideration Exports as same quantity of good i as much at it Imports. Conversely, if GL_i = 0, there is no intra-industry trade, only inter-industry trade. This would mean that the Country in consideration only either Exports or only Imports good i.

References

Grubel, Herbert G.; Lloyd, Peter J. (1971). "The Empirical Measurement of Intra-Industry Trade". Economic Record 47 (4): 494–517. doi:10.1111/j.1475-4932.1971.tb00772.x.
Grubel, Herbert G.; Lloyd, Peter J. (1975). Intra-industry trade: the theory and measurement of international trade in differentiated products. New York: Wiley. ISBN 0-470-33000-7.

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