The nature and extent of intra-industry trade in South Africa

Intra-industry trade occurs when goods from the same industry category are both exported \nand imported. Types of intra-industry trade are identified, and theoretical models of intraindustry \ntrade under conditions of imperfect competition are examined. The results of thirtyseven \nempirical studies on the determinants of intra-industry trade are analysed. Methods \nof measuring intra-industry trade and marginal intra-industry trade are discussed, and \nvarious measurement problems are dealt with. The extent of intra-industry trade in South \nAfrica in 1992 and 1997 is measured, using the Grubel-Lloyd and Michaely indices. The \nBrUlhart indices are applied to measure marginal intra-industry trade. South Africa has a \nrelatively low and stable level of intra-industry trade in manufactured goods: the GrubelLloyd \nindex for 1997 is calculated to be 37 per cent.