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Evolution of Machinery Production Networks: Linkage of North America with East Asia

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Author Info

  • Mitsuyo ANDO

    (Keio University)

  • Fukunari KIMURA

    (Economic Research Institute for ASEAN and East Asia (ERIA))

Abstract

This paper investigates the developing pattern of machinery trade and the extent and depth of production networks in North America from the perspective of their links with East Asia in the last two decades. Our descriptive analysis based on the total value of trade and the extensive margin demonstrates the expanding fragmentation of production in North America with a strong connection of Mexico, in addition to the US, with East Asia, particularly in the electric machinery sector. Our quantitative analysis on the total value of trade as well as extensive and intensive margins verifies the existence of such a strong connection with East Asia for machinery imports by North America, where Mexico enhanced a bridging role between East Asia and the US. These results reflect the reduction in services link costs, the further evolution of production sharing in the US-Mexico nexus, and the strengthening competitiveness for production networks in East Asia.

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Bibliographic Info

Paper provided by Economic Research Institute for ASEAN and East Asia (ERIA) in its series Working Papers with number DP-2013-32.

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Length: 58 pages.
Date of creation: Nov 2013
Date of revision:
Handle: RePEc:era:wpaper:dp-2013-32

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Related research

Keywords: the 2nd unbundling; fragmentation; agglomeration; free trade agreement (FTA); extensive margin;

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  1. Timothy J. Kehoe & Kim J. Ruhl, 2013. "How Important Is the New Goods Margin in International Trade?," Journal of Political Economy, University of Chicago Press, vol. 121(2), pages 358 - 392.
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  5. Kimura, Fukunari & Ando, Mitsuyo, 2005. "Two-dimensional fragmentation in East Asia: Conceptual framework and empirics," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 317-348.
  6. Joao Santos Silva & Silvana Tenreyro, 2005. "The Log of Gravity," CEP Discussion Papers dp0701, Centre for Economic Performance, LSE.
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  8. Ando, Mitsuyo & Kimura, Fukunari, 2013. "Production Linkage of Asia and Europe via Central and Eastern Europe," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 28, pages 204-240.
  9. Elhanan Helpman & Marc Melitz & Yona Rubinstein, 2008. "Estimating Trade Flows: Trading Partners and Trading Volumes," The Quarterly Journal of Economics, MIT Press, vol. 123(2), pages 441-487, 05.
  10. Mona Haddad & Ann Harrison & Catherine Hausman, 2010. "Decomposing the Great Trade Collapse: Products, Prices, and Quantities in the 2008-2009 Crisis," NBER Working Papers 16253, National Bureau of Economic Research, Inc.
  11. Aaditya Mattoo & Zhi Wang & Shang-Jin Wei, 2013. "Trade in Value Added : Developing New Measures of Cross-Border Trade," World Bank Publications, The World Bank, number 15809, October.
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