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Suitability of fragmentation model in East Asia

Author

Listed:
  • Hiroyuki Taguchi

    (Saitama University)

  • Ni Lar

    (JSPS Research Fellow)

Abstract

This paper examines the suitability of the fragmentation model in all the manufacturing industries in East Asia. Its main contribution is to apply the fully-modified gravity trade model to all the manufacturing industries in East Asia by including the two factors of fragmentation: the differences in location advantages and the levels of service-link costs. The empirics show that the total industry represents the suitability of the fragmentation only in the trade of intermediate goods, probably because the fragmentation accompanies active back-and-forth international transactions of intermediate goods such as processed goods, parts and components. As for the industrial estimation, the fragmentation model best fits the industries of chemicals, steel and machinery, since these industries may involve a large number of multi-layered vertical production processes so that the mechanics of fragmentation can be working well. The more in-depth analysis should, however, be required to support the estimation results with limited samples above.

Suggested Citation

  • Hiroyuki Taguchi & Ni Lar, 2016. "Suitability of fragmentation model in East Asia," Economics Bulletin, AccessEcon, vol. 36(3), pages 1771-1783.
    • Handle: RePEc:ebl:ecbull:eb-16-00020
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2016/Volume36/EB-16-V36-I3-P173.pdf
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    References listed on IDEAS

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    Cited by:

    1. Hiroyuki Taguchi & Mon Soe Thet, 2021. "Quantitative linkage between global value chains’ backward participation and logistics performance in the host country: a structural gravity model analysis of emerging ASEAN economies," Asia-Pacific Journal of Regional Science, Springer, vol. 5(2), pages 453-475, June.
    2. Taguchi, Hiroyuki & Zhao, Jun, 2022. "China’s global value chain linkage and logistics performances in emerging ASEAN economies," MPRA Paper 113808, University Library of Munich, Germany.
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    More about this item

    Keywords

    Fragmentation; East Asia; Location Advantages; Service-link Costs;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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