Global Production Sharing and South-South Trade
This paper examines patterns and determinants of trade among developing countries (South-South trade), with emphasis on the role of production sharing in global economic integration of the Southern economies. It begins with an analytical narrative of the emerging trends and patterns of South-South trade using a classification system that helps delineating trade based on global production sharing (network trade) from total recorded trade. Then it undertakes a comparative econometric analysis of the determinants of South-South and South-North trade using the standard gravity model. There is evidence that the share of South-South trade in world trade has increased significantly over the past two decades. However, this increase has predominantly come from the dynamic East Asian countries, reflecting their growing engagement in global production sharing. The growth dynamism of East-Asia centered production networks depends heavily on demand for final (assembled) goods in the Northern markets; South-South trade is largely complementary to, rather than competing with, South-North trade. While regional trading agreements (RTAs) could play a role at the margin, natural economic forces associated with growth and structural change in the economy and the overall macroeconomic climate as reflected in the real exchange rate, and the quality of trade related logistics are far more important in the expansion of South-South network trade.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +61 2 6125 4705
Fax: +61 2 6125 5448
Web page: https://crawford.anu.edu.au/acde/publications/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Brun, Jean-François & Carrère, Céline & de Melo, Jaime & Guillaumont, Patrick, 2002.
"Has Distance Died? Evidence from a Panel Gravity Model,"
CEPR Discussion Papers
3500, C.E.P.R. Discussion Papers.
- Jean-François Brun & Céline Carrère & Patrick Guillaumont & Jaime de Melo, 2005. "Has Distance Died? Evidence from a Panel Gravity Model," World Bank Economic Review, World Bank Group, vol. 19(1), pages 99-120.
- Jean-François BRUN & Céline CARRERE & Patrick GUILLAUMONT & Jaime MELO DE, 2002. "Has Distance Died? Evidence from a Panel Gravity Model," Working Papers 200215, CERDI.
- Judith M. Dean & K. C. Fung & Zhi Wang, 2011. "Measuring Vertical Specialization: The Case of China," Review of International Economics, Wiley Blackwell, vol. 19(4), pages 609-625, 09.
- Athukorala, Prema-chandra & Yamashita, Nobuaki, 2006.
"Production fragmentation and trade integration: East Asia in a global context,"
The North American Journal of Economics and Finance,
Elsevier, vol. 17(3), pages 233-256, December.
- Prema-chandra Athukorala & Nobuaki Yamashita, 2005. "Production Fragmentation and Trade Integration: East Asia in a Global Context," Departmental Working Papers 2005-07, The Australian National University, Arndt-Corden Department of Economics.
- Helpman, Elhanan, 2011. "Understanding Global Trade," Economics Books, Harvard University Press, number 9780674060784.
- Athukorala, Prema-chandra, 2010.
"Production Networks and Trade Patterns in East Asia: Regionalization or Globalization?,"
Working Papers on Regional Economic Integration
56, Asian Development Bank.
- Prema-chandra Athukorala, 2011. "Production Networks and Trade Patterns in East Asia: Regionalization or Globalization?," Asian Economic Papers, MIT Press, vol. 10(1), pages 65-95, January.
- Peter Egger, 2005. "Alternative Techniques for Estimation of Cross-Section Gravity Models," Review of International Economics, Wiley Blackwell, vol. 13(5), pages 881-891, November.
- Prema-chandra Athukorala, 2009. "Production Networks and Trade Patterns:East Asia in a Global Context," Departmental Working Papers 2009-15, The Australian National University, Arndt-Corden Department of Economics.
When requesting a correction, please mention this item's handle: RePEc:pas:papers:2012-12. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sandra Zec)
If references are entirely missing, you can add them using this form.