Intra-Industry Trade


The term intra-industry trade is used to refer to a process of exchanging equivalent products that belong to the same industrial sector, an example of this can be spare parts for vehicles, office supplies, among others. This type of trade is widely used in the area of ​​international trade, specifically in procedures that involve the import and export of goods belonging to the same industrial branch.

This type of trade is established under a series of principles, which establish that an economy must be specialized, in order to take full advantage of the progressive performance. It also establishes that the goal to be achieved has nothing to do with wanting to maintain differences with regard to local endowments, as established in neoclassical theories. This is also responsible for the States being able to specialize in controlled varieties of production in order to take advantage of the benefits that the economy of scale brings, all this without affecting the diversity of products that are available for their own consumption. .

Intra-industry trade can be of different types, three of which stand out the most, such as trade in horizontally differentiated goods, trade in homogeneous goods and trade in vertically differentiated goods. Although most of the theories that are responsible for studying intra-industry trade place greater emphasis on the exchange of products, it should be noted that there is currently an important market in the exchange of services.

There are those who often confuse the concept of intra-industry trade with inter-industry trade, however there are a number of characteristics that make a difference between the two. On the one hand, in inter-industrial trade, it is responsible for marketing products that belong to different branches of industry and which is present between different states, while in intra-industry trade, only products from the same industrial sector are traded. In addition to this, in the inter-industry, the primary objective is to achieve opportunity costs that contribute to the development of countries, companies and industry, so that they can specialize in branches where opportunity costs are low, which meant an important advance in the efficient trade of products, while in the intra-industry the objective is simply trade with products from the same branch.