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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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File URL: https://www.ifw-members.ifw-kiel.de/publications/growing-trade-in-intermediate-goods-outsourcing-global-sourcing-or-increasing-importance-of-mne-networks/kap1006.pdf
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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. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, Econometric Society, vol. 59(6), pages 1551-80, November.
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  3. Ray Barrell, 1999. "Manufactures Import Demand: Structural Differences in the European Union," NIESR Discussion Papers, National Institute of Economic and Social Research 196, National Institute of Economic and Social Research.
  4. Markus Diehl, 1999. "The Impact of International Outsourcing on the Skill Structure of Employment: Empirical Evidence from German Manufacturing Industries," Kiel Working Papers, Kiel Institute for the World Economy 946, Kiel Institute for the World Economy.
  5. Feenstra, R.C. & Hanson, G.H., 1995. "Foreign Investment, Outsourcing and Relative Wages," Department of Economics, California Davis - Department of Economics 95-14, California Davis - Department of Economics.
  6. Peter C.B. Phillips & Pierre Perron, 1986. "Testing for a Unit Root in Time Series Regression," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 795R, Cowles Foundation for Research in Economics, Yale University, revised Sep 1987.
  7. Rauch, James E., 1999. "Networks versus markets in international trade," Journal of International Economics, Elsevier, Elsevier, vol. 48(1), pages 7-35, June.
  8. 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, Federal Reserve Bank of New York, issue Jun, pages 79-99.
  9. 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).
  10. Jörn Kleinert, 1999. "Temporal Clusters in Foreign Direct Investment," Kiel Working Papers, Kiel Institute for the World Economy 930, Kiel Institute for the World Economy.
  11. Edward E. Leamer, 1996. "What's the Use of Factor Contents?," NBER Working Papers 5448, National Bureau of Economic Research, Inc.
  12. 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.
  13. Andersson, Thomas & Fredriksson, Torbjorn, 2000. "Distinction between intermediate and finished products in intra-firm trade," International Journal of Industrial Organization, Elsevier, Elsevier, vol. 18(5), pages 773-792, July.
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Citations

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Cited by:
  1. Guillaume Daudin & Paola Veroni & Christine Rifflart & Danielle Schweisguth, 2006. "Le commerce extérieur en valeur ajoutée," Sciences Po publications, Sciences Po info:hdl:2441/2537, Sciences Po.
  2. Marina Murat & Sergio Paba, 2005. "I distretti industriali tra immigrazione e internazionalizzazione produttiva," Department of Economics, University of Modena and Reggio E., Faculty of Economics "Marco Biagi" 0517, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
  3. Michael Landesmann & Robert Stehrer, 2009. "South-North Integration, Outsourcing and Skills," wiiw Research Reports 353, The Vienna Institute for International Economic Studies, wiiw.
  4. Thomas M. Steger & Lucas Bretschger, 2005. "Globalization, the volatility of intermediate goods prices and economic growth," CER-ETH Economics working paper series, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich 05/40, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  5. Michael Hübler, 2007. "A Simple Model of Outsourcing with Cournot Competition," Kiel Working Papers, Kiel Institute for the World Economy 1320, Kiel Institute for the World Economy.
  6. 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, DIW Berlin, German Institute for Economic Research, vol. 70(3), pages 434-449.
  7. 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, Elsevier, vol. 20(2), pages 162-176, August.
  8. Torben Andersen & Allan Sørensen, 2011. "Globalisation squeezes the public sector—is it so obvious?," International Tax and Public Finance, Springer, Springer, vol. 18(4), pages 369-382, August.
  9. 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, Sciences Po info:hdl:2441/9541, Sciences Po.
  10. Witada Anukoonwattaka, 2007. "Outsourcing and International Production of a Multinational: A Theoretical Model and Empirical Evidence from Toyota, Thailand," DEGIT Conference Papers, DEGIT, Dynamics, Economic Growth, and International Trade c012_045, DEGIT, Dynamics, Economic Growth, and International Trade.
  11. Seref Saygili & Cengiz Cihan & Cihan Yalcin & Turknur Hamsici, 2010. "Turkiye Imalat Sanayiin Ithalat Yapisi," Working Papers, Research and Monetary Policy Department, Central Bank of the Republic of Turkey 1002, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  12. 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, OECD Publishing 813, OECD Publishing.
  13. Hazel Parcon, 2008. "Disaggregating PTAs at the Role of International Division of Labor on PTA Formation," Working Papers, University of Hawaii at Manoa, Department of Economics 200806, University of Hawaii at Manoa, Department of Economics.
  14. repec:spo:wpecon:info:hdl:2441/9541 is not listed on IDEAS
  15. 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, Kiel Institute for the World Economy (IfW) 4318, Kiel Institute for the World Economy (IfW).
  16. Fernanda Ricotta, 2009. "Trade In Intermediate Goods In Italian Manufacturing Industries," Working Papers, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica) 200915, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
  17. repec:spo:wpecon:info:hdl:2441/2537 is not listed on IDEAS
  18. Jörn Kleinert, 2001. "The Role of Multinational Enterprises in Globalization: An Empirical Overview," Kiel Working Papers, Kiel Institute for the World Economy 1069, Kiel Institute for the World Economy.
  19. Vincent FRIGANT, 2013. "Une comparaison de l’internationalisation des chaînes d’approvisionnement automobiles allemande et française," Cahiers du GREThA, Groupe de Recherche en Economie Théorique et Appliquée 2013-09, Groupe de Recherche en Economie Théorique et Appliquée.
  20. Vincent FRIGANT (GREThA), 2007. "Between Internationalisation and Proximity: the internationalisation process of automotive first tier suppliers," Cahiers du GREThA, Groupe de Recherche en Economie Théorique et Appliquée 2007-13, Groupe de Recherche en Economie Théorique et Appliquée.

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