Grubel–Lloyd index

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

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