International Production Networks And Changing Trade Patterns In East Asia The Case Of The Electronics Industry
AbstractThe purpose of this paper is to analyze how the spread of different international production networks in East Asia has affected the trade links of the region with the U.S. and Japan. We concentrate on one particular aspect, i.e. changes in the product composition of U.S. and Japanese electronics exports and imports to and from the East Asia region. We find that compared to the U.S. , Japan’s trade links with East Asia display a far greater diversity of the product groups involved. Of equal importance is a second finding: the trade balances of both countries with the region are radically different. A consistently high and growing trade deficit characterizes U.S. trade links with East Asia in the electronic industry. This is true even for computers and components, the two sectors where the U.S. has re-established itself during the last few years as an uncontested leader. This is in stark contrast to the situation in Japan, where a large and rapidly growing surplus characterizes its trade links with East Asia. Although this is now slowly changing as East Asia has become the most important source of Japanese electronics imports, there is reason to doubt whether this positive development is strong enough to reduce any time soon the asymmetric nature of Japan’s trade links with East Asia. These differences can only be partially attributed to traditional macroeconomic factors that are the focus of standard trade theory. In the paper, we show how the observed differences can be better explained by some peculiar features of the international production networks that American and Japanese firms have established in East Asia. The chain of causation appears to work both ways. Changes in the organization of international production have led to changes in the composition of bilateral trade flows. Such changes in international trade patterns, in turn, lead to further changes in the organization of international production.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 97-7.
Date of creation: 1997
Date of revision:
Contact details of provider:
Web page: http://www.druid.dk/
international trade; international investment; economic development; business strategies; networks; Japan; USA; Asia; electronics industry;
Find related papers by JEL classification:
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
- L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Carl Bonham & Byron Gangnes & Ari Van Assche, 2007.
"Fragmentation and East Asia's information technology trade,"
Taylor & Francis Journals, vol. 39(2), pages 215-228.
- Carl Bonham & Byron Gangnes & Ari Van Assche, 2004. "Fragmentation and East Asia’s Information Technology Trade," Working Papers 200409, University of Hawaii at Manoa, Department of Economics.
- Kuwamori, Hiroshi & Okamoto, Nobuhiro, 2007. "Industrial Networks between China and the Countries of the Asia-Pacific Region," IDE Discussion Papers 110, Institute of Developing Economies, Japan External Trade Organization(JETRO).
- Imai, Ken'ichi & Shiu, Jingming, 2007. "A Divergent Path of Industrial Upgrading: Emergence and Evolution of the Mobile Handset Industry in China," IDE Discussion Papers 125, Institute of Developing Economies, Japan External Trade Organization(JETRO).
- Paolo Guerrieri & Filippo Vergara Caffarelli, 2012.
"Trade Openness and International Fragmentation of Production in the European Union: The New Divide?,"
Review of International Economics,
Wiley Blackwell, vol. 20(3), pages 535-551, 08.
- Paolo Guerrieri & Filippo Vergara Caffarelli, 2012. "Trade openness and international fragmentation of production in the European Union: the new divide?," Temi di discussione (Economic working papers) 855, Bank of Italy, Economic Research and International Relations Area.
- Bartzokas, Anthony, 2001. "European Financial Markets after Emu: A Review of Recent Literature and Evidence," EIFC - Technology and Finance Working Papers 1, United Nations University, Institute for New Technologies.
- Liu, C.-L.E., 2012. "An investigation of relationship learning in cross-border buyer–supplier relationships: The role of trust," International Business Review, Elsevier, vol. 21(3), pages 311-327.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Keld Laursen).
If references are entirely missing, you can add them using this form.