GEP Research Paper 08/08
An Account of Global Intra-industry Trade, 1962-2006
Marius Brülhart
Summary
This paper describes global intra-industry trade using data on some 39 million bilateral trade flows over the 1962-2006 period. The share of intra-industry trade has been gradually increasing, accounting for 27 percent of global trade in 2006 (measured at the five-digit level).
Abstract
This paper provides a comprehensive description of intra-industry trade patterns and trends, using data on more than 39 million bilateral trade flows. In 2006, 27 percent of global trade was intra-industry if measured at the finest (5-digit) level of statistical aggregation, and 44 percent if measured at a coarser (3-digit) level of statistical aggregation. The observed steady growth in global intra-industry trade since the early 1960s suggests a process of world-wide structural convergence: economies are becoming more similar over time in terms of their sectoral compositions. In particular since the 1990s, this trend appears to be driven to a significant extent by the international fragmentation of vertical production chains. Intra-industry trade is a high-income and middle-income country phenomenon: African trade remains overwhelmingly of the inter-industry type. Moreover, the observed increase in intra-industry trade was not accompanied by a comparable increase in marginal intra-industry trade, suggesting that trade-induced adjustment pressures remain potentially important.
Issued in February 2008
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