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Multinational Production Networks and the New Geo-economic Division of Labour in the Pacific Rim

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Prema-chandra Athukorala ()

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Abstract

This paper examines the implications of international fragmentation of production for trade patterns in the Pacific Rim, with special emphasis on regional and global integration of countries in East Asia. The analysis reveals that the degree of dependence of East Asia on this new global division labour is much larger compared to the other countries in the Pacific Rim and Europe. Network- related trade in parts and components has certainly strengthened intra-regional economic interdependence among the East Asian countries, but this has not lessoned the dependence of growth dynamism of these countries on the global economy. The operation of cross-border production networks depends inexorably on trade in final goods with North America and the European Union. The paper also probes the challenges posed by the fragmentation-based international division of labour for the 'flying geese' approach to the analysis of growth patterns in East Asia.

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Paper provided by Australian National University, Economics RSPAS in its series Departmental Working Papers with number 2006-09.

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Length: 33 pages
Date of creation: 2006
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Handle: RePEc:pas:papers:2006-09

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Related research
Keywords: production fragmentation multinational production networks economic transition in China

Other versions of this item:

Find related papers by JEL classification:
F15 - International Economics - - Trade - - - Economic Integration
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

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  1. Lall, Sanjaya & Albaladejo, Manuel, 2004. "China's Competitive Performance: A Threat to East Asian Manufactured Exports?," World Development, Elsevier, vol. 32(9), pages 1441-1466, September. [Downloadable!] (restricted)
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  2. Robert C. Feenstra, . "Integration Of Trade And Disintegration Of Production In The Global Economy," Department of Economics 98-06, California Davis - Department of Economics. [Downloadable!]
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  3. Balassa, Bela, 1979. "The Changing Pattern of Comparative Advantage in Manufactured Goods," The Review of Economics and Statistics, MIT Press, vol. 61(2), pages 259-66, May. [Downloadable!] (restricted)
  4. Gene M. Grossman & Elhanan Helpman, 2002. "Outsourcing in a Global Economy," NBER Working Papers 8728, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Ng, Francis & Yeats, Alexander, 1999. "Production sharing in East Asia : who does what for whom, and why?," Policy Research Working Paper Series 2197, The World Bank. [Downloadable!]
  6. Prema-chandra Athukorala, 2003. "Product Fragmentation and Trade Patterns in East Asia," Departmental Working Papers 2003-21, Australian National University, Economics RSPAS. [Downloadable!]
    Other versions:
  7. Robert C. Feenstra et al., 1999. "Discrepancies in International Data: An Application to China-Hong Kong Entrepot Trade," American Economic Review, American Economic Association, vol. 89(2), pages 338-343, May. [Downloadable!] (restricted)
  8. repec:rus:hseeco:123689 is not listed on IDEAS
  9. Ronald Jones; Henryk Kierzkowski; Chen Lurong, 2004. "What does the evidence tell us about fragmentation and outsourcing," HEI Working Papers 09-2004, Economics Section, The Graduate Institute of International Studies. [Downloadable!]
  10. Ng, Francis & Yeats, Alexander, 2003. "Major trade trends in East Asia : what are their implications for regional cooperation and growth," Policy Research Working Paper Series 3084, The World Bank. [Downloadable!]
  11. Kaminski, Bartlomiej & Ng, Francis, 2005. "Production disintegration and integration of Central Europe into global markets," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 377-390. [Downloadable!] (restricted)
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