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Trade Productivity Upgrading, Trade Fragmentation, and FDI in Manufacturing: The Asian Development Experience

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  • Singh, Nirvikar
  • Mora, Jesse

Abstract

This paper examines the experience of 10 Asian countries with respect to growth, trade and FDI. It explores relationships between the nature of exports and imports and growth, as well as the relevance of FDI as a channel for these relationships. We find that FDI is often positively correlated with higher productivity levels in exports and imports. The effect for imports is particularly apparent for imported intermediate goods, reflecting the emergence of greater trade fragmentation. In turn, both imported intermediates and exports that are associated with higher productivity levels are positively correlated with per capita GDP. This paper therefore brings together empirical evidence that integrates discussions of FDI, trade fragmentation and improvements in the productivity of traded goods.

Suggested Citation

  • Singh, Nirvikar & Mora, Jesse, 2012. "Trade Productivity Upgrading, Trade Fragmentation, and FDI in Manufacturing: The Asian Development Experience," Santa Cruz Department of Economics, Working Paper Series qt1d62r9n5, Department of Economics, UC Santa Cruz.
    • Handle: RePEc:cdl:ucscec:qt1d62r9n5
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    2. Richard Baldwin & Masahiro Kawai & Ganeshan Wignaraja (ed.), 2014. "A World Trade Organization for the 21st Century," Books, Edward Elgar Publishing, number 15991, March.
    3. Yunling Zhang & Rongyan Wang, 2014. "The role of foreign direct investment flows and a possible multilateral agreement," Chapters, in: Richard Baldwin & Masahiro Kawai & Ganeshan Wignaraja (ed.), A World Trade Organization for the 21st Century, chapter 13, pages 403-420, Edward Elgar Publishing.

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