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Facilitating international production networks: The role of trade logistics

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  • Daniel Saslavsky
  • Ben Shepherd

Abstract

Networked trade in parts and components is more sensitive to the importer's logistics performance than is final goods trade. The difference between the two trade semi-elasticities is over 45%, which is quantitatively important. We also find that logistics performance is particularly important for trade among developing countries in the Asia-Pacific region, which is where the emergence of production networks has been most pronounced. Logistics performance is also more important for South-South trade than for South-North trade. Our results suggest that developing country policymakers can support the development of international production networks by improving trade logistics performance.

Suggested Citation

  • Daniel Saslavsky & Ben Shepherd, 2014. "Facilitating international production networks: The role of trade logistics," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(7), pages 979-999, October.
  • Handle: RePEc:taf:jitecd:v:23:y:2014:i:7:p:979-999
    DOI: 10.1080/09638199.2013.811534
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    References listed on IDEAS

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    1. Jean-François Arvis & Yann Duval & Ben Shepherd & Chorthip Utoktham, 2012. "Trade Costs in the Developing World:1995 – 2010," Working Papers 12112, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
    2. Maria Persson, 2013. "Trade facilitation and the extensive margin," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(5), pages 658-693, August.
    3. shepherd, Ben, 2010. "Geographical Diversification of Developing Country Exports," World Development, Elsevier, vol. 38(9), pages 1217-1228, September.
    4. Mona Haddad & Ben Shepherd, 2011. "Managing Openness : Trade and Outward-oriented Growth After the Crisis," World Bank Publications, The World Bank, number 2283, July.
    5. Alberto Behar & Philip Manners & Benjamin D. Nelson, 2013. "Exports and International Logistics," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 75(6), pages 855-886, December.
    6. Mitsuyo Ando & Fukunari Kimura, 2005. "The Formation of International Production and Distribution Networks in East Asia," NBER Chapters,in: International Trade in East Asia, NBER-East Asia Seminar on Economics, Volume 14, pages 177-216 National Bureau of Economic Research, Inc.
    7. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
    8. Robert C. Feenstra, 1996. "U.S. Imports, 1972-1994: Data and Concordances," NBER Working Papers 5515, National Bureau of Economic Research, Inc.
    9. Fukunari KIMURA & Ayako OBASHI, 2010. "International Production Networks in Machinery Industries: Structure and Its Evolution," Working Papers DP-2010-09, Economic Research Institute for ASEAN and East Asia (ERIA).
    10. Shepherd, Ben & Wilson, John S., 2009. "Trade facilitation in ASEAN member countries: Measuring progress and assessing priorities," Journal of Asian Economics, Elsevier, vol. 20(4), pages 367-383, September.
    11. Chahir Zaki, 2008. "Does Trade Facilitation Matter in Bilateral Trade ?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00348924, HAL.
    12. Matthias Helble & Ben Shepherd & John S. Wilson, 2009. "Transparency and Regional Integration in the Asia Pacific," The World Economy, Wiley Blackwell, vol. 32(3), pages 479-508, March.
    13. Allen Dennis & Ben Shepherd, 2011. "Trade Facilitation and Export Diversification," The World Economy, Wiley Blackwell, vol. 34(1), pages 101-122, January.
    14. Portugal-Perez, Alberto & Wilson, John S., 2012. "Export Performance and Trade Facilitation Reform: Hard and Soft Infrastructure," World Development, Elsevier, vol. 40(7), pages 1295-1307.
    15. John S. Wilson & Catherine L. Mann & Tsunehiro Otsuki, 2005. "Assessing the Benefits of Trade Facilitation: A Global Perspective," The World Economy, Wiley Blackwell, vol. 28(6), pages 841-871, June.
    16. Bernard Hoekman & Alessandro Nicita, 2010. "Assessing the Doha Round: Market access, transactions costs and aid for trade facilitation," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 19(1), pages 65-79.
    17. Hildegunn Kyvik Nordås & Enrico Pinali & Massimo Geloso Grosso, 2006. "Logistics and Time as a Trade Barrier," OECD Trade Policy Papers 35, OECD Publishing.
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    Citations

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    Cited by:

    1. Jaime DE MELO & Ben SHEPHERD, 2018. "The Economics of Non-Tariff Measures: A Primer," Working Papers P212, FERDI.
    2. Hoekman, Bernard, 2014. "The Bali Trade Facilitation Agreement and Rulemaking in the WTO: Milestone, Mistake or Mirage?," CEPR Discussion Papers 10212, C.E.P.R. Discussion Papers.
    3. Lord, Montague, 2015. "Regional Economic Integration in Central Asia and South Asia," MPRA Paper 66436, University Library of Munich, Germany.
    4. Patalinghug, Epictetus E., 2015. "Supply Chain Connectivity: Enhancing Participation in the Global Supply Chain," Discussion Papers DP 2015-14, Philippine Institute for Development Studies.
    5. Asian Development Bank (ADB), 2013. "Asian Economic Integration Monitor - October 2013," ADB Reports RPS136096-3, Asian Development Bank (ADB), revised 28 Jan 2014.
    6. Prabir De, 2014. "Strengthening Regional Trade and Production Networks Through Transport Connectivity in South and South-West Asia," Development Papers 1401, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West Asia Office.
    7. Lord, Montague & Artuso, Fabio & Record, Richard & Clarke, Julian, 2014. "Trading Costs in East Asia’s Global Value Chains," MPRA Paper 66437, University Library of Munich, Germany.
    8. Hoekman, Bernard & Shepherd, Ben, 2013. "Who Profits from Trade Facilitation Initiatives?," CEPR Discussion Papers 9490, C.E.P.R. Discussion Papers.
    9. repec:bla:worlde:v:40:y:2017:i:3:p:499-516 is not listed on IDEAS
    10. Ben Shepherd, 2017. "Global Value Chains and Development of Light Manufacturing in Ethiopia," Working Papers 018, Ethiopian Development Research Institute.
    11. repec:era:wpaper:dp-2015-49 is not listed on IDEAS
    12. Beverelli, Cosimo & Neumueller, Simon & Teh, Robert, 2015. "Export Diversification Effects of the WTO Trade Facilitation Agreement," World Development, Elsevier, vol. 76(C), pages 293-310.
    13. Bernard Hoekman & Ben Shepherd, 2017. "Services Productivity, Trade Policy and Manufacturing Exports," The World Economy, Wiley Blackwell, vol. 40(3), pages 499-516, March.
    14. repec:unt:esctis:tis18 is not listed on IDEAS

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