Does intra-industry specialisation enhance or limit comparative advantage? Evidence from the world citrus fruit trade

Abstract

In this paper, we aim to identify the intensity and nature of intra-industry specialisation in the global trade in citrus fruits. We used data from the United Nations Comtrade database. We performed both static and dynamic assessments of the intensity of intra-industry trade (IIT) by using the traditional Grubel-Lloyd index and the marginal IIT (MIIT) index, respectively. We also separated IIT into horizontal and vertical trade, and we verified the relationship between changes in the intra-industry pattern of trade and the level of comparative advantage gained by the largest producers and exporters of citrus fruits in the world. We used the revealed symmetric comparative advantage (RSCA) index to evaluate the level of international competitiveness. Conducting these analyses allowed us to fill the existing research gap by identifying the nature of IIT in products with specific quality characteristics but at a lower processing stage. The study's results indicated that the stronger the IIT or the more intensive shifts toward deepening the intra-industry specialisation, the lesser the comparative advantage of a country in the global export of citrus fruits. Nevertheless, the increased intensity of intra-industry specialisation does not always lead to a deterioration in the value of the trade balance.