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Growing Trade in Intermediate Goods: Outsourcing, Global Sourcing, or Increasing Importance of MNE Networks?

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  • Jörn Kleinert

Abstract

Growth in trade is often seen to have played a dominant role in integrating national economies. Analyses of this role have, however, almost exclusively been based on trade in final goods. This paper attempts to address this problem by analyzing recent growth in intermediate goods. Three possible causes are posited for this growth: outsourcing, global sourcing, and the increasing importance of MNE networks. These are examined in two analytical frameworks: one using OECD input-output table data and one using German time-series data. Results from both frameworks give strong support to the hypothesis that international production plays a great role in explaining the strong increase in intermediate inputs imports of developed countries. The evidence for the hypothesis that the increasing importance of the MNE network causes the growing trade in intermediate goods is especially strong. The outsourcing hypothesis receives also some support. Copyright Blackwell Publishing Ltd 2003.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of International Economics.

Volume (Year): 11 (2003)
Issue (Month): 3 (08)
Pages: 464-482

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Handle: RePEc:bla:reviec:v:11:y:2003:i:3:p:464-482

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  7. Jörn Kleinert, 1999. "Temporal Clusters in Foreign Direct Investment," Kiel Working Papers 930, Kiel Institute for the World Economy.
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Citations

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Cited by:
  1. Jörn Kleinert, 2001. "The Role of Multinational Enterprises in Globalization: An Empirical Overview," Kiel Working Papers 1069, Kiel Institute for the World Economy.
  2. Witada Anukoonwattaka, 2007. "Outsourcing and International Production of a Multinational: A Theoretical Model and Empirical Evidence from Toyota, Thailand," DEGIT Conference Papers c012_045, DEGIT, Dynamics, Economic Growth, and International Trade.
  3. Marzinotto, Benedicta, 2009. "Beyond monetary credibility: The impact of globalisation on the output-inflation trade-off in euro-area countries," The North American Journal of Economics and Finance, Elsevier, vol. 20(2), pages 162-176, August.
  4. Vincent FRIGANT (GREThA), 2007. "Between Internationalisation and Proximity: the internationalisation process of automotive first tier suppliers," Cahiers du GREThA 2007-13, Groupe de Recherche en Economie Théorique et Appliquée.
  5. Michael Landesmann & Robert Stehrer, 2009. "South-North Integration, Outsourcing and Skills," wiiw Research Reports 353, The Vienna Institute for International Economic Studies, wiiw.
  6. Seref Saygili & Cengiz Cihan & Cihan Yalcin & Turknur Hamsici, 2010. "Turkiye Imalat Sanayiin Ithalat Yapisi," Working Papers 1002, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  7. Hazel Parcon, 2008. "Disaggregating PTAs at the Role of International Division of Labor on PTA Formation," Working Papers 200806, University of Hawaii at Manoa, Department of Economics.
  8. Marina Murat & Sergio Paba, 2005. "I distretti industriali tra immigrazione e internazionalizzazione produttiva," Department of Economics 0517, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
  9. Fernanda Ricotta, 2009. "Trade In Intermediate Goods In Italian Manufacturing Industries," Working Papers 200915, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
  10. Thomas M. Steger & Lucas Bretschger, 2005. "Globalization, the volatility of intermediate goods prices and economic growth," CER-ETH Economics working paper series 05/40, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  11. Torben M. Andersen & Allan Sørensen, 2008. "Globalisation squeezes the public sector - is it so obvious?," Economics Working Papers 2008-08, School of Economics and Management, University of Aarhus.
  12. Nunnenkamp, Peter, 2004. "The German automobile industry and Central Europe's integration into the international division of labour : foreign production, intra-industry trade, and labour market repercussions," Open Access Publications from Kiel Institute for the World Economy 4318, Kiel Institute for the World Economy (IfW).
  13. Vincent FRIGANT, 2013. "Une comparaison de l’internationalisation des chaînes d’approvisionnement automobiles allemande et française," Cahiers du GREThA 2013-09, Groupe de Recherche en Economie Théorique et Appliquée.
  14. Michael Hübler, 2007. "A Simple Model of Outsourcing with Cournot Competition," Kiel Working Papers 1320, Kiel Institute for the World Economy.
  15. Hubert Strauß, 2001. "Euroland's Trade with Third Countries: An Estimation Based on NIPA Data," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 70(3), pages 434-449.
  16. Guillaume Daudin & Christine Rifflart & Danielle Schweisguth, 2008. "Value-Added Trade and Regionalization. GTAP Eleventh Annual Conference "Future of Global Economy", Helsinki, Finland," Sciences Po publications info:hdl:2441/9541, Sciences Po.

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