Production sharing in East Asia : who does what for whom, and why?
AbstractThe authors analyze empirical information on the nature and magnitude of, and motivation for, international production sharing in East Asia. To do so, they use a largely untapped source of data on inter- and intra-regional trade in parts and components. Some of their findings: East Asian trade in components is considerably greater than often recognized. Regional global exports of parts and components totaled $178 billion in 1996, and imports of those products about $12 billion less. Components now constitute one-fifth of East Asian exports of manufactures. Imports of components, measured as a share of all manufactures, are growing considerably faster in East Asia than in OECD Europe or North America. The value of East Asian global imports of components rose more than ninefold over the period 1985-96. Almost three-quarters of all East Asian imports of telecommunications equipment are components for further assembly. East Asian global exports of components grew faster then any other major product group over 1984-96, when their exchange increased 15 percent a year (compared with 11 percent for all products ). Although Japanese exports declined slightly in 1997, shipments from most other East Asian countries increased 9 to 16 percent. Why did production sharing expand? Analyses of traditionally revealed comparative advantage use export statistics to determine whether a country has a comparative advantage in the production of a good. The same indices, calculated using import statistics for components, can show whether a country has a comparative advantage in the assembly of a product. Using statistics on component imports, the authors find that: Japan, Singapore, and Taiwan (China)--which are exiting most assembly operations--increased their specialization in the manufacture of components. Assembly operations, which are labor-intensive, tend to migrate to low-wage East Asian countries. Indonesia, Malaysia, and Thailand have the broadest and most mature assembly capacity for components. But no East Asian country has developed its domestic assembly operations as much as Mexico, which has a comparative advantage in 70 percent of all component groups. Collectively, East Asian countries are strengthening their comparative advantage in the production of components; the results are mixed for assembly operations.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 2197.
Date of creation: 31 Oct 1999
Date of revision:
Environmental Economics&Policies; Trade Policy; Earth Sciences&GIS; Economic Theory&Research; General Manufacturing; Economic Theory&Research; Environmental Economics&Policies; Trade Policy; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Earth Sciences&GIS;
Find related papers by JEL classification:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Finger, J M, 1975. "Tariff Provisions for Offshore Assembly and the Exports of Developing Countries," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 85(338), pages 365-71, June.
- Hal B. Lary, 1968. "Imports of Manufactures from Less Developed Countries," NBER Books, National Bureau of Economic Research, Inc, number lary68-1.
- Finger, J M, 1976. "Trade and Domestic Effects of the Offshore Assembly Provision in the U.S. Tariff," American Economic Review, American Economic Association, American Economic Association, vol. 66(4), pages 598-611, September.
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page. reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.