Product Fragmentation and Trade Patterns in East Asia
Abstractproduct fragmentation - the cross-border dispersion of component production/assembly within vertically integrated production processes - is an important feature of the deepening structural interdependence of the world economy. This paper examines the implications of this phenomenon for global and regional trade patterns, with special emphasis on countries in East Asia, using a new data set culled from the UN trade database. It is found that, while 'fragmentation trade' has generally grown faster than total world trade in manufacturing, the degree of dependence of East Asia on this new form of international specialisation is proportionately larger compared to North America and Europe. The upshot is that international product fragmentation has made the East Asian growth dynamism increasingly reliant on extra-regional trade, strengthening the case for a global, rather than a regional, approach to trade and investment policymaking.
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Bibliographic InfoPaper provided by The Australian National University, Arndt-Corden Department of Economics in its series Departmental Working Papers with number 2003-21.
Length: 69 pages
Date of creation: Oct 2003
Date of revision:
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product fragmentation; globalisation; multinational enterprises;
Other versions of this item:
- Prema-chandra Athukorala, 2005. "Product Fragmentation and Trade Patterns in East Asia," Asian Economic Papers, MIT Press, vol. 4(3), pages 1-27, October.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-01-18 (All new papers)
- NEP-DEV-2004-01-18 (Development)
- NEP-SEA-2004-01-18 (South East Asia)
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