INTERNATIONAL TRADE INDICATORS

Definition:

The intra-regional export share of a country refers to the proportion of that country’s total exports directed to other countries within a specific geographical region. This metric highlights the extent to which a country’s export activities are concentrated within its own region as opposed to global markets.

Significance:

• Regional Integration: Intra-regional export share provides insights into the level of economic integration within a region. High intra-regional export shares often indicate strong trade ties and interdependence among countries in the region.

• Market Access: It reflects how much of a country’s export market is geographically close, often benefiting from regional trade agreements, reduced transportation costs, or similar regulations.

• Economic Stability: Higher intra-regional exports can provide stability, as regional markets might be less volatile than distant global markets due to shared economic interests, common currencies, or similar political stability.

• Policy Formulation: Governments can use this indicator to assess the success of regional trade agreements and to inform trade policy decisions that might enhance regional cooperation and economic growth.

Formula:

We calculate the Intra-Regional Export Share by dividing a country’s intra-regional exports over its total exports multiplied by 100. 

Where:

• Intra-Regional Exports refers to the total value of a country’s exports to other countries within the same region.
• Total Exports refers to the total value of a country’s exports to all countries globally.

Interpretation:

• High Intra-Regional Export Share: Indicates that the country relies heavily on regional markets for its exports. This could signal strong trade agreements or cultural/linguistic similarities, but it could also mean over-reliance on a narrow group of countries, increasing vulnerability to regional economic downturns.

• Low Intra-Regional Export Share: Suggests that the country is more integrated into the global economy and less dependent on regional trade. While this could diversify export risk, it might also mean that regional trade agreements or proximity advantages are underutilized.

Range

The range of intra-regional export shares typically falls between 0% and 100%:

• 0%: Indicates that a country exports none of its goods to other countries within its region.
• 100%: Indicates that a country exports all of its goods to countries within its region.

In most cases, the intra-regional export share is somewhere in between these extremes. For example, highly integrated regions like the European Union or ASEAN often have higher intra-regional export shares compared to less integrated regions. Conversely, countries heavily reliant on exporting to distant markets or global partners might have lower intra-regional export shares.

Limitation:

• Narrow Focus: Intra-regional export share focuses solely on the regional aspect, which may overlook significant global trade patterns and trends, particularly if a country is more globally oriented.

• Dependence Risk: A high intra-regional export share could mask over-dependence on regional markets, leading to vulnerability if the region faces economic challenges.

• Misleading for Small Regions: For countries in smaller regions with limited economic capacity, a high intra-regional export share might reflect limited global trade options rather than strong regional integration.

• Ignores Import Dynamics: This metric only accounts for exports and may not reflect the complete trade dynamics, such as the role of imports, which are essential to understanding full economic relationships within the region.