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Impact of the ASEAN Economic Community on ASEAN Production Networks

Author

Listed:
  • Kornkarun Cheewatrakoolpong

    (Asian Development Bank Institute (ADBI))

  • Chayodom Sabhasri
  • Nath Bunditwattanawong

Abstract

Empirical evidence suggests that the emergence of international production networks in East Asia results from market-driven forces such as vertical specialization and higher production costs in the home countries and institutional-led reasons such as free trade agreements. The growth in trade in parts and components since the 1990s, especially with the People’s Republic of China (PRC), one of the important major assembly bases, confirms the existence of international production sharing in the region. Also, a decline in the share of parts and components trade in several members of the Association of Southeast Asian Nations (ASEAN) such as Indonesia and Thailand indicates the increasing importance of the ASEAN countries as assembly bases for Japanese multinational enterprises (MNEs). This paper examines two industries—autos and auto parts, and hard disk drives (HDDs)—to understand international production networks. The study examines the structure of vertical intra-industry trade among East Asian countries, especially members of the Association of Southeast Asian Nations, depicts international production sharing in the selected industries, namely HDD, and automobiles and automotive parts, in the region. The study also points out the importance of the People’s Republic of China and Thailand as assembly bases. It concludes that investment promotion policies contributed more to the emergence of international production networks than free trade agreements.

Suggested Citation

  • Kornkarun Cheewatrakoolpong & Chayodom Sabhasri & Nath Bunditwattanawong, 2013. "Impact of the ASEAN Economic Community on ASEAN Production Networks," Microeconomics Working Papers 23393, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:microe:23393
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    Cited by:

    1. Elms, Deborah, 2020. "Impact of the ASEAN Economic Community and implications for Latin America," Documentos de Proyectos 46513, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. repec:ilo:ilowps:486999 is not listed on IDEAS
    3. repec:era:eriabk:2021-impact-of-the-atiga-on-intra-asean-trade is not listed on IDEAS
    4. repec:ilo:ilowps:486525 is not listed on IDEAS
    5. Okabe, Misa, 2025. "Economic development of land-border regions under ASEAN economic integration," Journal of Asian Economics, Elsevier, vol. 96(C).
    6. Ronald Umali Mendoza & Charles Siriban & Tea Jalin Ty, 2019. "Survey Of Economic Implications Of Maritime And Territorial Disputes," Journal of Economic Surveys, Wiley Blackwell, vol. 33(3), pages 1028-1049, July.
    7. Techakanont, Kriengkrai., 2014. "Managing integration for better jobs and shared prosperity in the ASEAN Economic Community the case of Thailand's automotive sector," ILO Working Papers 994865253402676, International Labour Organization.
    8. Huntington, Hillard G. & Barrios, James J. & Arora, Vipin, 2019. "Review of key international demand elasticities for major industrializing economies," Energy Policy, Elsevier, vol. 133(C).
    9. repec:ilo:ilowps:486521 is not listed on IDEAS
    10. Martin, Philip L., & Abella, Manolo I., 2014. "Reaping the economic and social benefits of labour mobility : ASEAN 2015," ILO Working Papers 994865213402676, International Labour Organization.
    11. Jayant Menon, 2013. "Can FTAs Support the Growth or Spread of International Production Networks in Asia?," Departmental Working Papers 2013-06, The Australian National University, Arndt-Corden Department of Economics.
    12. Yap, Josef T., 2014. "ASEAN Community 2015 : managing integration for better jobs and shared prosperity in the Philippines," ILO Working Papers 994869993402676, International Labour Organization.

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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