Intraindustry specialization in production and trade in newly industrializing countries: A conceptual framework and some empirical evidence from East Asia

Abstract

This paper argues that as newly industrializing countries continue on a path of industrialization-led growth and development, their pattern of manufacturing production and trade specialization tends to resemble that of the industrial countries. Consequently, the importance of intraindustry specialization in production and trade in certain manufactures increases in newly industrializing countries. This hypothesis is tested in the analysis of intraindustry trade in manufactures of East Asian newly industrializing countries. As expected, the economic development and industrial growth of these countries is accompanied by growth in intraindustry trade in manufactures. A substantial proportion of this trade is with industrial countries.