The objective of this paper is to analyse whether and how recent North-South trade relations have been influenced by intra-industry trade patterns. The assumption is that there are continuous patterns of intra-industry trade within and outside the product categories the Northern and the Southern country trade with each other most commonly. However, they only represent a fraction of the otherwise dominating inter-industry type of trade. By analysing a case study of the bilateral trade between Germany and Nigeria, it is found that the nature of intra-industry trade is governed by two central causes: 1) the minor diversification of the Nigerian economy and low levels of trade in non-mineral products and 2) the revitalisation of traditional inter-industry trade dynamics brought about by the gradual move towards a Euro-African Free Trade Area.
Table of Contents
1. Introduction
2. Literature review
2.1. Patterns conventional trade theory does not explain: Reviewing the analytical gaps of the Heckscher-Ohlin theorem
2.2. The emergence of alternative theories that incorporate intra-industry trade
Intra-industry trade between countries with similarly high per capita incomes: The first concepts of intra-industry trade
Intra-industry trade between countries with dissimilar per capita incomes: The different perspectives on North-South intra-industry trade
2.3. Recent expansions of North-South intra-industry trade models
3. Objectives and Methodology
4. Case Study: Nigeria’s trade with the “North”
4.1. Nigeria’s foreign trade profile
Overall trade structure and main trading partners
Trade patterns between the EU and Nigeria and the relevance of Germany
Recent bilateral intra-industry trade between Germany and Nigeria
4.2. The history of Euro–African (–Nigerian) trade agreements
5. Analysis: North-South intra-industry trade in a less diversified Nigerian economy
5.1. The persisting dominance of inter-industry trade in Nigeria
5.2. The modest but continuous development of Nigerian intra-industry trade with the Northern partner
5.3. The gradual move towards a Euro-African Free Trade Area and consequences for intra-industry trade in Nigeria
6. Conclusions
7. References
Research Objectives and Themes
This dissertation examines whether and how recent North-South trade relations are influenced by intra-industry trade patterns, utilizing a case study of bilateral trade between Germany and Nigeria to explore the impact of economic diversification and trade agreements.
- The dominance of inter-industry trade versus emerging intra-industry trade patterns.
- The impact of domestic economic diversification on trade sophistication.
- The role of foreign direct investment (FDI) in shaping trade structures.
- The influence of EU-African trade agreements on trade dynamics.
Excerpt from the Book
4.1. Nigeria’s foreign trade profile
When discussing foreign trade in the context of Nigeria, many sources refer to the one-sided economy the country has developed more than 40 years ago (e.g. Sanu & Onwuka, 1997: 4). Although these figures should be known to anyone related to international trade, they remain to be appalling: out of the total $99.7bn merchandise exports in 2014, 92% are attributed to the export of mineral products (see Table I.). At the same time, around 70% of total public revenues emerged solely from oil sector revenues (AEO, 2016: 5). In the period from 2009 to 2013, nearly half (48.7%) of the country’s trade growth was due to the growth in world trade while only 15% were caused by specialisation or product competitiveness (ITC, 2016).
As a consequence, the recent decline in world oil prices not only poses a major threat to businesses and employment within the oil sector but to the stability of the economy as a whole (AEO, 2016: 3). Scholars and policymakers have taken this circumstance as a very urgent call to diversify the structure of the Nigerian economy.
Summary of Chapters
1. Introduction: Discusses the theoretical limitations of the Heckscher-Ohlin model and introduces the concept of intra-industry trade in North-South contexts.
2. Literature review: Reviews existing theories on intra-industry trade, contrasting the Heckscher-Ohlin theorem with alternative models including the Linder hypothesis and modern North-South perspectives.
3. Objectives and Methodology: Outlines the research focus on Nigeria and the case study approach used to analyze bilateral trade data.
4. Case Study: Nigeria’s trade with the “North”: Provides an empirical review of Nigeria's trade profile, specifically focusing on the relationship with Germany and historical Euro-African trade agreements.
5. Analysis: North-South intra-industry trade in a less diversified Nigerian economy: Analyzes the dominance of inter-industry trade and the limited but continuous development of intra-industry links within the Nigerian economy.
6. Conclusions: Summarizes the findings, noting the marginal impact of intra-industry trade and the risk that freer trade agreements may entrench existing trade imbalances.
7. References: Lists the academic and institutional sources used for the study.
Keywords
Intra-industry trade, Inter-industry trade, North-South trade, Nigeria, Germany, Heckscher-Ohlin model, Foreign Direct Investment, Economic Partnership Agreements, Trade liberalization, Economic diversification, Trade agreements, Value chains, EU-African trade, Industrialization, Primary commodities.
Frequently Asked Questions
What is the core focus of this research?
The research investigates how North-South trade relations are influenced by intra-industry trade patterns, specifically looking at the case of Nigeria and its trade with Germany.
What are the primary themes discussed?
The paper covers the dominance of primary commodity exports in Nigeria, the theoretical shortcomings of traditional trade models, the role of FDI, and the implications of EU-African trade agreements like the EPAs.
What is the central objective of the study?
The objective is to determine if and how recent trade between North and South has moved beyond traditional inter-industry exchange toward more sophisticated intra-industry trade patterns.
Which methodology is employed?
The author uses a case study approach, combining descriptive evaluations of trade flows with a political economy analysis of historical and current trade agreements.
What does the main body cover?
It provides a literature review on trade theory, an empirical analysis of Nigerian trade data, and a critical look at how trade policy and bilateral agreements have historically shaped the Nigerian economy.
Which keywords best describe the work?
The work is defined by terms such as intra-industry trade, North-South trade, Nigeria, Economic Partnership Agreements, and industrial diversification.
How does the Nigerian economy impact trade patterns?
The study finds that the lack of economic diversification, specifically the heavy reliance on mineral product exports, limits the potential for developing more sophisticated intra-industry trade chains.
What is the author's conclusion on future trade agreements?
The author argues that current moves toward freer trade, such as the EPAs, may inadvertently strengthen traditional inter-industry dependencies rather than fostering industrial diversification in Nigeria.
- Citar trabajo
- Kareem Bayo (Autor), 2016, Changing trends in North-South trade contexts? An assessment of the intra-industry trade patterns between Germany and Nigeria, Múnich, GRIN Verlag, https://www.grin.com/document/420452
