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International production sharing and economic development: moving up the value-chain for a small-open economy

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  • Nicholas Sim

Abstract

This study theoretically examines the factors required by a small-open economy to move up the value-chain. To carry out the study, a framework of production sharing involving a large developed country and a less developed small-open economy is used. Service bundles are modelled as inputs for coordinating the manufacturing activities located across the countries. It is found that the small-open economy can move up the value-chain when the size of its skilled labour force increases and the production cost of its service bundles decreases.

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  • Nicholas Sim, 2004. "International production sharing and economic development: moving up the value-chain for a small-open economy," Applied Economics Letters, Taylor & Francis Journals, vol. 11(14), pages 885-889.
  • Handle: RePEc:taf:apeclt:v:11:y:2004:i:14:p:885-889
    DOI: 10.1080/1350485042000285841
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    References listed on IDEAS

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    1. Blomström, Magnus & Kokko, Ari & Sjöholm, Fredrik, 2002. "Growth & Innovation Policies For a Knowledge Economy. Experiences From Finland, Sweden & Singapore," EIJS Working Paper Series 156, Stockholm School of Economics, The European Institute of Japanese Studies.
    2. Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February.
    3. Ngo Van Long & Ray Riezman & Antoine Soubeyran, 2001. "Fragmentation, Outsourcing and the Service Sector," CIRANO Working Papers 2001s-43, CIRANO.
    4. Hijzen, Alexander & Görg, Holger & Hine, Robert C., 2003. "International Fragmentation and Relative Wages in the UK," IZA Discussion Papers 717, Institute for the Study of Labor (IZA).
    5. Michael Burda & Barbara Dluhosch, 2000. "Fragmentation, Globalization and Labor Markets," CESifo Working Paper Series 352, CESifo Group Munich.
    6. Avinash K. Dixit & Gene M. Grossman, 1982. "Trade and Protection with Multistage Production," Review of Economic Studies, Oxford University Press, vol. 49(4), pages 583-594.
    7. van Schaik, Anton B. T. M. & de Groot, Henri L. F., 2002. "Macroeconomic consequences of downsizing," Economic Modelling, Elsevier, vol. 19(3), pages 331-352, May.
    8. Robert Feenstra & Gordon Hanson, 2001. "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages," NBER Working Papers 8372, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Toru Kikuchi, 2008. "Economic Integration in a Chamberlinian-Ricardian World," EERI Research Paper Series EERI_RP_2008_07, Economics and Econometrics Research Institute (EERI), Brussels.

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