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Is Firm-Level International Trade More Pronounced at the Inter-industry or Intra-industry Level?

Traditionally, imports and exports between developing and developed countries have been considered inter-industry trade in which primary commodities and industrial products are imported and exported, while imports and exports between developed countries are considered intra-industry trade. In recent years, economic integration has led to the development of a form of intra-industry trade that corresponds to the cross-border division of labor between developing countries and developed countries or between developing countries, which has been increasing.

We analyze industry sector-specific international trade network and global inter-firm production network to determine whether international trade is more pronounced at inter-industry or intra-industry level. The identified communities in the international trade network reveal a six-backbones structure.

We find that each community consists of mainly the same or similar industries. We also find that the first to fifth-largest communities involve developed countries, while the sixth-largest linked community involves only developed countries. This community structure means that international trade is actively transacted among the same or similar industry sectors. Conversely, all communities except for the fifth-largest community in the global production network involve both developed and developing countries.

This result is consistent with the results obtained in the sector-specific international trade network. The obtained results support the assertion that firm-level international trade is more pronounced at intra-industry level, which corresponds to the cross-border division of labor between developing countries and developed countries.

A. Chakraborty, Y. Ikeda, Is Firm-Level International Trade More Pronounced at the Inter-industry or Intra-industry Level?, In: Ikeda Y., Iyetomi H., Mizuno T. (eds) Big Data Analysis on Global Community Formation and Isolation, Springer: Singapore

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