Intra-Industry Trade

Inter-Industry and Intra-Industry Trade and International Trade Economy

In relation to international trade economy, Christopher Mark (1993) provided the following definition of Inter-Industry and Intra-Industry Trade: Inter-industry trade involves exchanges between countries that link complementary industries, such as steel and automobiles, reflecting differences in the trading partners' economic resources (i.e., differences in comparative advantage and consequent specialization). In contrast, intra-industry trade involves two-way international trade flows within a single industry –such as electronics –and often consists of highly specialized components and subassemblies in transactions between affiliated firms in different countries. About one-quarter of world trade consists of intra-industry trade, which plays an especially prominent role in trade in manufactured goods among the industrial nations (see globalization).