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Measuring international production fragmentation: where do we stand?

Author

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  • Silvia Formentini
  • P. Lelio Iapadre

Abstract

Despite the growing importance of international fragmentation of production, it is still difficult to accurately assess its real size and effect. Several different indicators were proposed over the last decade, but their capacity to provide precise and consistent results is often hindered by the lack of proper data. From an academic and a political standpoint, gaining quantitative knowledge on international vertical fragmentation in production and trade is a major challenge, thus calling for robust and accurate measurement tools. As a first step to face this challenge, this paper takes stock of indicators proposed in the literature, highlighting their advantages and drawbacks and stressing the data requirements.

Suggested Citation

  • Silvia Formentini & P. Lelio Iapadre, 2008. "Measuring international production fragmentation: where do we stand?," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 1(3), pages 330-352.
  • Handle: RePEc:ids:ijtlid:v:1:y:2008:i:3:p:330-352
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    References listed on IDEAS

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    1. Fosfuri, Andrea & Motta, Massimo & Ronde, Thomas, 2001. "Foreign direct investment and spillovers through workers' mobility," Journal of International Economics, Elsevier, pages 205-222.
    2. Richard Disney & Jonathan Haskel & Ylva Heden, 2003. "Restructuring and productivity growth in uk manufacturing," Economic Journal, Royal Economic Society, vol. 113(489), pages 666-694, July.
    3. Peri, Giovanni & Urban, Dieter, 2006. "Catching-up to foreign technology? Evidence on the "Veblen-Gerschenkron" effect of foreign investments," Regional Science and Urban Economics, Elsevier, vol. 36(1), pages 72-98, January.
    4. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, pages 605-627.
    5. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 317-341.
    6. Gorg, Holger & Strobl, Eric, 2001. "Multinational Companies and Productivity Spillovers: A Meta-analysis," Economic Journal, Royal Economic Society, vol. 111(475), pages 723-739, November.
    7. Anabel Marin & Martin Bell, 2006. "Technology spillovers from Foreign Direct Investment (FDI): the active role of MNC subsidiaries in Argentina in the 1990s," Journal of Development Studies, Taylor & Francis Journals, vol. 42(4), pages 678-697.
    8. Takii, Sadayuki, 2005. "Productivity spillovers and characteristics of foreign multinational plants in Indonesian manufacturing 1990-1995," Journal of Development Economics, Elsevier, pages 521-542.
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    Cited by:

    1. Fabienne Fortanier & Selwyn Moons, 2011. "Foreign Investors in The Netherlands: Heterogeneous Employment and Productivity Effects," De Economist, Springer, pages 511-531.

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