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

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Author Info

  • Jörn Kleinert

Abstract

Trade in intermediate goods as one possible link between rising trade and foreign direct investment is examined. To explain growing intermediate goods trade, three hypotheses are brought forward: outsourcing, global sourcing and the increasing importance of MNE networks. These hypotheses are tested by employing a cross-section framework, which uses OECD input-output table data, and an analysis, which relies on German time-series data. Increasing importance of MNE networks is found to be a reason of growing trade in intermediate goods in the cross-section and the time-series framework. The evidence for outsourcing and global sourcing is found to be much weaker.

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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1006.

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Length: 43 pages
Date of creation: Oct 2000
Date of revision:
Handle: RePEc:kie:kieliw:1006

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Related research

Keywords: Globalization; Intermediate Goods Trade; Outsourcing; Global Sourcing; Multinational Enterprise;

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References

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  1. Phillips, P.C.B., 1986. "Testing for a Unit Root in Time Series Regression," Cahiers de recherche 8633, Universite de Montreal, Departement de sciences economiques.
  2. Robert Feenstra, 2003. "Integration Of Trade And Disintegration Of Production In The Global Economy," Working Papers 986, University of California, Davis, Department of Economics.
  3. Andersson, Thomas & Fredriksson, Torbjorn, 2000. "Distinction between intermediate and finished products in intra-firm trade," International Journal of Industrial Organization, Elsevier, vol. 18(5), pages 773-792, July.
  4. Jose Campa & Linda S. Goldberg, 1997. "The Evolving External Orientation of Manufacturing Industries: Evidence from Four Countries," NBER Working Papers 5919, National Bureau of Economic Research, Inc.
  5. Markus Diehl, 1999. "The Impact of International Outsourcing on the Skill Structure of Employment: Empirical Evidence from German Manufacturing Industries," Kiel Working Papers 946, Kiel Institute for the World Economy.
  6. James E. Rauch, 1996. "Networks versus Markets in International Trade," NBER Working Papers 5617, National Bureau of Economic Research, Inc.
  7. Ray Barrell, 1999. "Manufactures Import Demand: Structural Differences in the European Union," NIESR Discussion Papers 196, National Institute of Economic and Social Research.
  8. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
  9. David Hummels & Dana Rapoport & Kei-Mu Yi, 1998. "Vertical specialization and the changing nature of world trade," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 79-99.
  10. Robert C. Feenstra & Gordon H. Hanson, 1995. "Foreign Investment, Outsourcing and Relative Wages," NBER Working Papers 5121, National Bureau of Economic Research, Inc.
  11. Edward E. Leamer, 1996. "What's the Use of Factor Contents?," NBER Working Papers 5448, National Bureau of Economic Research, Inc.
  12. Dunlevy, James A. & Hutchinson, William K., 2001. "The Pro-Trade Effect of Immigration on American Exports During the Late Nineteenth and Early Twentieth Centuries," IZA Discussion Papers 375, Institute for the Study of Labor (IZA).
  13. 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. Torben Andersen & Allan Sørensen, 2011. "Globalisation squeezes the public sector—is it so obvious?," International Tax and Public Finance, Springer, vol. 18(4), pages 369-382, August.
  2. 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.
  3. Guillaume Daudin & Paola Veroni & Christine Rifflart & Danielle Schweisguth, 2006. "Le commerce extérieur en valeur ajoutée," Sciences Po publications info:hdl:2441/2537, Sciences Po.
  4. Luiz de Mello & Pier Carlo Padoan & Linda Rousová, 2010. "Are Global Imbalances Sustainable?: Shedding Further Light on the Causes of Current Account Reversals," OECD Economics Department Working Papers 813, OECD Publishing.
  5. 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.
  6. repec:spo:wpecon:info:hdl:2441/9541 is not listed on IDEAS
  7. Bretschger, Lucas & Steger, Thomas, 2013. "Globalization, The Volatility Of Intermediate Goods Prices, And Economic Growth," Macroeconomic Dynamics, Cambridge University Press, vol. 17(02), pages 402-430, March.
  8. 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.
  9. 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).
  10. 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.
  11. Jörn Kleinert, 2001. "The Role of Multinational Enterprises in Globalization: An Empirical Overview," Kiel Working Papers 1069, Kiel Institute for the World Economy.
  12. 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.
  13. 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.
  14. 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".
  15. Michael Landesmann & Robert Stehrer, 2009. "South-North Integration, Outsourcing and Skills," wiiw Research Reports 353, The Vienna Institute for International Economic Studies, wiiw.
  16. 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.
  17. 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.
  18. Michael Hübler, 2007. "A Simple Model of Outsourcing with Cournot Competition," Kiel Working Papers 1320, Kiel Institute for the World Economy.
  19. repec:spo:wpecon:info:hdl:2441/2537 is not listed on IDEAS
  20. 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).

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