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IIT (Sectoral)
The sectoral intra-industry trade (IIT) is a measure of the degree to which trade in a particular sector represents intra-industry trade (based on scale economies and/or market structure). By engaging in IIT, a country can reduce the number of similar goods it produces, and benefit from scale economies. Higher IIT ratios suggest that these sources of gains are being exploited. May also indicate that adjustment costs would be lower with trade expansion.

The IIT index measures the degree of overlap between imports and exports in the same commodity category, with a value of 1 indicating pure intra-industry trade and a value of 0 indicating pure inter-industry trade.

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Definition:
One minus the ratio of the absolute value of exports in a given product category less imports in the same category to the sum of exports and imports in the category.

Range of values:
The index ranges from 0 to 1, with zero indicating pure inter-industry trade, and one indicating pure intra-industry trade.

For further note on this indicator, including an example and formula, see the relevant section of Trade Statistics in Policymaking: A Handbook of Commonly Used Trade Indices and Indicators.

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