Intra-industry trade: A portrait of global patterns during 2000-2022

Objective: The article aims to identify patterns of world intra-industry trade (IIT) during the turbulent period 2000-2022. This period includes global slowdown after attack on World Trade Centre (2001-2002), global prosperity and intensive internationalisation known as ‘hyper-globalisation’ (2002-2008), global financial (2008) and economic (2009) crisis, post-crisis economic rebound (2010), stagnation or moderate growth period (2010-2019), pandemic (2020-2021), and escalation of war in Ukraine (2022). The article includes studies on intra-industry trade of selected countries and groups of countries, as well as an analysis of the world and the European Union average of two-way trade. Research Design & Methods: We analysed IIT disaggregated into six-digit Harmonized System codes using the United Nations Comtrade database. We employed Grubel-Lloyd indices. Findings: Our results confirmed that world trade is still mainly inter-industry and that the developed countries conduct much more intensive IIT than the rest of the world. The slight decline between years 2000 and 2022 in global intra-industry’s share has been accompanied by the increasing role of developing countries in international trade flows. We proved that some developing countries are, with time, more intensive IIT participants. It holds especially for members of RTAs with developed countries and participants in international production. Implications & Recommendations: We examined IIT of about 150 countries over more than the last two decades and found that, as expected, in many developing countries the share of IIT was still low. Despite the much bigger engagement of developing countries in global value chains and global production networks, their trade remains mainly inter-industry. Thus, there is a space for industrial policies in developing countries. We recommend more intensive capital inflows into these countries and intensification of their manufacturing production, e.g., in the framework of global value chains. Moreover, to address low levels of IIT in some developing countries, international policy should focus on reducing trade barriers, promoting product differentiation, and encouraging economies of scale. Specifically, trade liberalisation, investments in research and development, and policies that foster competition can help boost IIT. Contribution & Value Added: IIT is still a hotly debated issue. We calculated Grubel-Lloyd indices for country-pairs from the whole world (bilateral trade), for selected countries with all partners and also the world average for more than twenty years. To our best knowledge, there has been no such analysis of world IIT during the period 2000-2022 thus far. Moreover, our study brings valuable conclusions, recommendations and research future directions which are crucial for the growing role of International Economics (and International Business) in social sciences.