Production fragmentation and trade integration: East Asia in a global context

Athukorala, Prema‐chandra; Yamashita, Nobuaki

doi:10.1016/j.najef.2006.07.002

Cited by 237 publications

(178 citation statements)

References 17 publications

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“…Although the formation of international production networks has not been limited to the machinery sector, the machinery industry is by far the most important, both quantitatively and qualitatively, and extends the most sophisticated networks across East Asia and other regions (See Fukao et al 2003;Athukorala and Yamashita 2006;Kimura 2006). In 2006, the share of machinery parts & components in the total intra-regional merchandise exports from and imports to respective East Asian countries ranges from 13% to 66% and 14% to 52%, respectively.…”

Section: These Two Features Of the Transactions Of Intermediate Goodsmentioning

confidence: 99%

Stability of production networks in East Asia: Duration and survival of trade

Obashi

2010

Japan and the World Economy

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This paper sheds light on the stability of international production networks in East Asia from the perspective of the duration and survival of bilateral trade relationships at the product-line level. Using highly disaggregated data for intra-East Asian machinery trade, survival analysis is conducted as well as the examinations of the duration and volatility of trade relationships. The product-level analyses reveal that, compared to machinery finished products, machinery parts & components are traded through longer-lived and more stable relationships among East Asian countries. Once transactions are started, trade relationships of machinery parts & components are more likely to be maintained between countries even at a long distance, regardless of the exchange-rate fluctuations. The probability of discontinuing trade relationships of machinery finished products, on the other hand, are more likely to be sensitive to the level of trading cost as well as the exchange-rate fluctuations.

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Section: These Two Features Of the Transactions Of Intermediate Goodsmentioning

confidence: 99%

Stability of production networks in East Asia: Duration and survival of trade

Obashi

2010

Japan and the World Economy

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“…The share of trade in parts and components provides a proxy measure of fragmentation that has been widely used in the literature. Even if trade in intermediate goods as a whole has not risen much faster than trade in final goods, data show that trade in parts and components has exhibited a dynamism exceeding that of trade in final goods (see Athukorala and Yamashita (2006) and for a review). The main advantage of this approach is the accessibility of the data and its comparability across countries, allowing the identification of specific trading partner relationships.…”

Section: Measuring the International Fragmentation Of Productionmentioning

confidence: 99%

“…The international fragmentation of production, i.e. the crossborder dispersion of components' production/assembly within vertically integrated production processes, with countries specializing in particular stages of the production sequence, has been an important feature of the deepening structural interdependence of the world economy in recent decades (see Athukorala and Yamashita (2006)). This fact resulted in a growth of trade in parts and components (also called "middle products" or "fragments of final goods") at a rate exceeding that of trade in final goods.…”

Section: Introductionmentioning

confidence: 99%

Vertical specialization across the world: A relative measure

Amador¹,

Cabral²

2009

The North American Journal of Economics and Finance

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This paper investigates a specific aspect of international production linkages that, following Hummels et al. (2001), is commonly designated as vertical specialization (VS) -the use of imported inputs to produce goods that are afterwards exported. We propose a relative measure of VS-based trade that combines information from Input-Output matrices and international trade data, producing results for a large sample of individual countries and geographical areas with a detailed product breakdown over the 1967-2005 period. This measure identifies a country's trade flow as associated with VS activities when the share of exports of a good relatively to the world average is above a given threshold and it is accompanied by a relative share of imports of a related intermediate product that is also above the threshold. The quantification of VS-based trade for each country/product pair in each period is made in a relative and conservative manner, since it includes only the value of intermediate imports that surpasses what is implied by the chosen international threshold. The detailed results can be subsequently added up to get any product or geographical breakdown desired. We illustrate this measure by showing the evolution of VS activities at the world level over the last four decades using a product breakdown by technological intensity and a geographical breakdown by main areas. The results point to a substantial increase of VS in high-technology products over the last two decades. There is also empirical evidence on the sharp increase of VS activities in East Asia.

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“…These results contrast sharply with those of Gagnon and Rose (1995), who find considerable persistence in the direction of net trade and, thus, evidence against the product cycle theory. would benefit greatly by accounting for these last two points, as the international landscape changed significantly with the rise of China and the increasing importance of trade fragmentation (e.g., Kaur, 2009 andAthukorala andYamashita, 2006). A new pattern of trade dynamics appears to be emerging, perhaps characterized by both more competition and more opportunities.…”

Section: Discussionmentioning

confidence: 99%

Trade Dynamics in the East Asian Miracle: A Time Series Analysis of U.S.-East Asia Commodity Trade, 1962-1992

Singh

Carolan²,

Mora

2012

SSRN Journal

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We examine the composition of bilateral trade between the United States and eight Asian Pacific economies from 1962 to 1992. Two complementary time series analyses of individual commodities at the SITC four-digit level indicate that significant changes occurred in trade composition during this period. We use a measure of normalized trade balances, developed by Gagnon and Rose (1995). For the eight bilateral trade relationships, commodities representing from fifty to seventy percent of 1992 dollar trade have shown statistically significant changes in the magnitude and, in some cases, in the direction of normalized trade balances, over the thirtyyear period. Results support the conclusion that changes in trade patterns in both low-tech industries, such as textiles and clothing, and more high-tech industries, such as electronic parts and electronic goods, were important in the development of the East Asian economies.

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Production fragmentation and trade integration: East Asia in a global context

Cited by 237 publications

References 17 publications

Stability of production networks in East Asia: Duration and survival of trade

Stability of production networks in East Asia: Duration and survival of trade

Vertical specialization across the world: A relative measure

Trade Dynamics in the East Asian Miracle: A Time Series Analysis of U.S.-East Asia Commodity Trade, 1962-1992

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