Abstract
This paper decomposes manufacturing import growth rates in a selected set of large industrial and developing countries (five industrial and eight developing) and measures the relative contributions of domestic demand and market share changes for two separate periods 1991/92-2001/02 and 2001/02-2007/08. It also shows the shares of imports both from the rest of the world and from developing countries for aggregate and three digit manufacturing sectors. Import growth is much higher during the 2000s driven by higher demand growth rates. While market share changes explain most of the growth during the 1990s, its contribution is relatively smaller during the 2000s. Imports from developing countries have grown much faster both in industrial and developing country markets driven primarily by market share changes. However, more than half of market share gains by developing countries are caused by the exports of China which accounts for more than 70 percent of market share gains of developing countries in our sample countries during the 2000s. Despite rapid growth, developing country’s share in the gross absorption of the sample countries is still very low and can expand substantially even if demand growth is much lower in the near future.
Highlights
Within the last few decades, global manufactured goods trade has grown very fast
Despite rapid growth, developing country’s share in the gross absorption of the sample countries is still very low and can expand substantially even if demand growth is much lower in the near future
Imports from developing countries have grown much faster both in industrial and developing country markets. Their share in the absorption of the sample countries is still very low and can expand substantially even if demand growth is much lower in the near future
Summary
Within the last few decades, global manufactured goods trade has grown very fast. This growth has been driven both by liberalization of trade regimes across the globe and high demand growth rates especially among developing countries and especially during the 2000s. Trade liberalization has contributed to global trade expansion. As trade barriers have fallen, increased production sharing and specialization have led to expansion of both exports and imports. These developments have led to increased import shares in almost all countries. While much of liberalization has been unilateral, there are greater uses of regional agreements
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