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The Evolution of Industrial Networks in East Asia: Stylized Facts and Role of Trade Facilitation Policies

In: Production Networks and Enterprises in East Asia

Author

Listed:
  • Hubert Escaith

    (World Trade Organization)

  • Satoshi Inomata

    (Development Studies Center, Institute of Developing Economies, Japan External Trade Organization)

Abstract

Deepening industrial interdependency in East Asia was not just a spontaneous phenomenon, but it has been carefully aided and facilitated by the series of policies implemented by national governments. The objective of the chapter is to provide a nontechnical introduction to the use of input–output analysis and graph theory for understanding trade in the global value chain perspective. Applying these topological properties to the East Asian and Pacific context, we show that the inter-industry network moved from a simple hub-and-spokes cluster to a much more complex structure with the emergence of the People’s Republic of China and the specialization of several countries as secondary pivots. The densification of productive networks resulted from the coincidence of business strategies with the promotion of export-led growth policies from developing East Asian countries. These countries applied a series of trade facilitation measures that lowered tariff duties and reduced other transaction costs. Tariff escalation was greatly reduced, lessening the anti-export bias attached to high effective protection rates and improving the competitiveness of second-tier national suppliers. The other axis of trade facilitation focused on improving logistics services and cross-border procedures. While East Asia is well ahead of the rest of developing Asia in this respect, there is still a wide margin of progress in order to close the gap with best international practices.

Suggested Citation

  • Hubert Escaith & Satoshi Inomata, 2016. "The Evolution of Industrial Networks in East Asia: Stylized Facts and Role of Trade Facilitation Policies," ADB Institute Series on Development Economics, in: Ganeshan Wignaraja (ed.), Production Networks and Enterprises in East Asia, edition 1, chapter 0, pages 113-138, Springer.
    • Handle: RePEc:spr:adbchp:978-4-431-55498-1_6
    DOI: 10.1007/978-4-431-55498-1_6
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    Citations

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    Cited by:

    1. Escaith, Hubert, 2018. "Mapping the UK domestic and global value chains from a Brexit perspective," MPRA Paper 87824, University Library of Munich, Germany.
    2. He, Yaxing & Huo, Weidong & Yu, Jie, 2023. "Tracing the regional dual value chains: Measurement on the production position and evidence from China," Journal of Asian Economics, Elsevier, vol. 85(C).
    3. Zhi Wang & Shang-Jin Wei & Xinding Yu & Kunfu Zhu, 2017. "Characterizing Global Value Chains: Production Length and Upstreamness," NBER Working Papers 23261, National Bureau of Economic Research, Inc.
    4. Ulrich Blum & Jiarui Zhong, 2021. "The Loss of Raw Material Criticality: Implications of the Collapse of Saudi Arabian Oil Exports," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 56(6), pages 362-370, November.

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