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Production Fragmentation and Trade Integration: East Asia in a Global Context

  • Prema-chandra Athukorala

    ()

  • Nobuaki Yamashita

    ()

This paper examines the implications of international production fragmentation for analysing global and regional trade patterns, with special emphasis on countries in East Asia. It is found that, while 'fragmentation trade' has generally grown faster than total world manufacturing trade, the degree of dependence of East Asia on this new form of international specialisation is proportionately larger compared to North America and Europe. International production fragmentation has certainly played a pivotal role in continuing dynamism of the East Asian economies and increasing intra-regional economic interdependence. There is, however, no evidence to suggest that this new form of international exchange has contributed to lessoning the regions dependence on the global economy. On the contrary, growth dynamism based on vertical specialisation depends inexorably on extra-regional trade in final good, and this dependence has in fact increased over the years.

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File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2005/wp-econ-2005-07.pdf
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Paper provided by The Australian National University, Arndt-Corden Department of Economics in its series Departmental Working Papers with number 2005-07.

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Length: 48 pages
Date of creation: 2005
Date of revision:
Handle: RePEc:pas:papers:2005-07
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