Intra-industry trade in Latin America and the Caribbean

Abstract

An increasingly important component of total world trade is intra-industry trade (IIT). The large volume of literature on IIT is reflective of this importance. However, this extensive literature has focused almost completely on explaining the causes of IIT. This focus has left a puzzling gap in the literature. Specifically, it is almost impossible to determine the level of IIT for a particular country or region. Further, there is almost no information on the level of IIT at the industry level either globally or for a region or country. In this paper we provide estimates of IIT for the world and for the countries of the Western Hemisphere. Further, we provide estimates of IIT for ten different SITC product categories on the same basis. The findings of the paper indicate that in most industries, IIT in Latin America is substantially lower overall than the world average. There are, however, substantial variations observed both by country and by industry. Because the results are the first available for the region as a whole, they should allow researchers to get a better picture of the extent of IIT in Latin America and the Caribbean by country and by industry.Intra-industry trade; Latin America