Intra-industry trade in South Africa.

Abstract

Intra-industry trade is a recent development in international trade theory. This study attempts, for the first time, to measure the extent of intra-industry trade in South Africa. It is found that approximately a one-third of total South African trade is of the intra-industry type. The first chapter places theoretical developments accounting for intra-industry trade in relation to the conventional models of trade. This chapter is followed by a detailed coverage of seven models that allow for intra-industry trade, in order to ascertain the major determinants of intra-industry trade. A third chapter examines the "existence problem" and discusses measures of intra-industry trade and a fourth chapter estimates the level of intra-industry trade in South Africa. Statistical analyses of the major determinants of intra-industry trade were generally successful, except for the poor performance of product differentiation proxies. A final chapter concerns the commercial policy and welfare aspects of intra-industry trade, concluding that there are gains to be had, from social and political changes within South Africa, if such changes lead to greater economic integration and cooperation in the Southern Africa region.