Trade Within and Between Corporations
A common misconception about international trade is to
consider that nations are the trading units. In reality, the
great majority of trade flows concern corporations exchanging
parts and goods with other corporations. Nations are simply the
unit use to record accounts since trade flows crossing borders
are usually subject to customs procedures and declarations. About one third of what is considered international trade actually
concerns elements (production plants, distribution centers,
warehouses, etc.) of the same multinational corporation exchanging goods. This figure
can even go above 50% if only advanced economies are considered.
Global trade has thus gradually shifted from an inter-industrial to
an intra-industrial structure of exchange, a trend favored by the
emergence of global supply chains.