Question

What is splitting up the value chain?

Short answer

With improvement in communication technology, sharing information and transportation. It resulted into the 'splitting up of the value chain'.

Step-by-step solution

Step 1. Meaning of intra-industry trade.

It refers to the exchange of similar products belonging to the same industry. The term is usually applied to international trade, where the same types of goods or services are both imported and exported.

Step 2. Splitting up the value.

Basically, when there is intra-industry trade it affected or impacted the value chain. The value chain describes how a good is produced in stages. This value chain is supported by improvement in communication technology, sharing information and transportation. Thus, 'splitting up the value chain' means that several stages of producing a good take place in different countries around the world. Instead of production in a single large factory, all of these steps can be split up among different firms operating in different places and even different countries.