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Trajectory of Southeast Asian Production Fragmentation

Author

Listed:
  • David Christian
  • Lili Yan Ing

    (Economic Research Institute for ASEAN and East Asia (ERIA))

Abstract

This paper examines recent trends in production fragmentation within ASEAN’s manufacturing sector in the context of shifting global trade dynamics and rising economic nationalism. Using the OECD’s Trade in Value Added (TiVA) database, we construct two key indicators: (i) the input fragmentation ratio (FRI), which measures overall reliance on intermediate inputs, and (ii) the import fragmentation ratio (FRM), which captures the extent of cross-border input sourcing. Our analysis reveals that, unlike North America and Europe, ASEAN has not experienced a decline in input fragmentation since the Global Financial Crisis (GFC). However, signs of import defragmentation have emerged since 2010. We also find notable variation in fragmentation patterns across countries and industries. These results highlight the need for further research into the drivers of these trends, including investment and production relocation to ASEAN, market positioning, industry specialisation, and technological factors.

Suggested Citation

  • David Christian & Lili Yan Ing, 2025. "Trajectory of Southeast Asian Production Fragmentation," Working Papers DP-2025-01, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:wpaper:dp-2025-01
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    More about this item

    Keywords

    production fragmentation; global value chains (GVCs); manufacturing in ASEAN and East Asia; supply chain resilience;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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