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Globalization and Country-Specific Service Links

Author

Listed:
  • Stephen S. Golub

    (Swarthmore College)

  • Ronald W. Jones

    (University of Rochester)

  • Henryk Kierzkowski

    (Graduate Institute of International Studies, Geneva)

Abstract

The Jones-Kierzkowski model of global fragmentation of production draws attention to the cost and efficiency of “service links” connecting “production blocks” in different countries. Country-specific service links include transport and telecommunications infrastructure and the overall business climate. Mobile factors of production, most prominently foreign direct investment (FDI), can shop around for countries with the most functional and inexpensive service links along with low labor costs. Those countries with favorable business climates and well-functioning service links are able to attract FDI and other mobile inputs, and participate in international production networks. We provide evidence that successful exporters of manufactures, notably in East Asia, have relatively favorable service links. A cross-section analysis of manufactured exports and of FDI in manufacturing confirms the importance of service link infrastructure.

Suggested Citation

  • Stephen S. Golub & Ronald W. Jones & Henryk Kierzkowski, 2007. "Globalization and Country-Specific Service Links," RCER Working Papers 532, University of Rochester - Center for Economic Research (RCER).
    • Handle: RePEc:roc:rocher:532
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    References listed on IDEAS

    as
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    Cited by:

    1. Prema-chandra Athukorala & Tala Talgaswatta & Omer Majeed, 2017. "Global production sharing: Exploring Australia's competitive edge," The World Economy, Wiley Blackwell, vol. 40(10), pages 2172-2192, October.
    2. Peter Debaere & Holger Görg & Horst Raff, 2013. "Greasing the wheels of international commerce: how services facilitate firms’ international sourcing," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(1), pages 78-102, February.
    3. Götz Zeddies, 2011. "Determinants of international fragmentation of production in European Union," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 38(4), pages 511-537, November.
    4. Bojan Shimbov & Maite Alguacil & Celestino Su�rez, 2013. "Fragmentation and parts and components trade in the Western Balkan countries," Post-Communist Economies, Taylor & Francis Journals, vol. 25(3), pages 371-391, September.
    5. Prema-chandra Athukorala, 2021. "The Philippines in global manufacturing value chains: A tale of arrested growth," Departmental Working Papers 2021-22, The Australian National University, Arndt-Corden Department of Economics.
    6. Ceglowski Janet & Golub Stephen S., 2012. "Does China Still Have a Labor Cost Advantage?," Global Economy Journal, De Gruyter, vol. 12(3), pages 1-30, September.
    7. Alastaire Sèna ALINSATO, 2015. "Globalization, Poverty And Role Of Infrastructures," Journal of Economics and Political Economy, KSP Journals, vol. 2(1s), pages 197-212, May.
    8. Prema-chandra Athukorala & Peter B. Dixon & Maureen T. Rimmer, 2017. "Global Supply Chains: towards a CGE analysis," Centre of Policy Studies/IMPACT Centre Working Papers g-281, Victoria University, Centre of Policy Studies/IMPACT Centre.
    9. Pattnayak, Sanja Samirana & Chadha, Alka, 2022. "Servicification and manufacturing exports: Evidence from India," Economic Modelling, Elsevier, vol. 108(C).
    10. Millanida Hilman, Rafiazka & Widodo, Tri, 2015. "Global Production Sharing in Machinery and Transport Equipment Industry in the ASEAN4," MPRA Paper 79663, University Library of Munich, Germany.
    11. Peter B. Dixon & Maureen Rimmer, 2019. "Integrating a Global Supply Chain Model With a Computable General Equilibrium Model," Centre of Policy Studies/IMPACT Centre Working Papers g-292, Victoria University, Centre of Policy Studies/IMPACT Centre.
    12. Eric W. Bond & Yan Ma, 2013. "Learning by Doing and Fragmentation," Pacific Economic Review, Wiley Blackwell, vol. 18(5), pages 603-627, December.
    13. Dixon, Peter B. & Rimmer, Maureen T., 2022. "Winners and losers in global supply chain trade: Embedding GSC in CGE," Economic Modelling, Elsevier, vol. 106(C).
    14. Fumio Dei, 2010. "Peripheral Tasks Are Offshored," Review of International Economics, Wiley Blackwell, vol. 18(5), pages 807-817, November.
    15. Golub, Stephen & Hayat, Faraz, 2014. "Employment, unemployment, and underemployment in Africa," WIDER Working Paper Series 014, World Institute for Development Economic Research (UNU-WIDER).
    16. Henryk Kierzkowski & Lurong Chen, 2007. "Outsourcing and Trade Imbalances: The U.S: - China Case," DEGIT Conference Papers c012_003, DEGIT, Dynamics, Economic Growth, and International Trade.
    17. Ma, Yan, 2015. "The product cycle hypothesis: The role of quality upgrading and market size," International Review of Economics & Finance, Elsevier, vol. 39(C), pages 326-336.
    18. Prema‐chandra Athukorala, 2019. "Joining Global Production Networks: Experience and Prospects of India," Asian Economic Policy Review, Japan Center for Economic Research, vol. 14(1), pages 123-143, January.
    19. Jones, Ronald W., 2010. "Art works in international trade theory," International Review of Economics & Finance, Elsevier, vol. 19(1), pages 64-74, January.
    20. Prema‐chandra Athukorala & Peter B. Dixon & Maureen T. Rimmer, 2018. "Global Supply Chains: Towards A Computable General Equilibrium Analysis," Economic Papers, The Economic Society of Australia, vol. 37(3), pages 198-219, September.
    21. Henryk Kierzkowski & Lurong Chen, 2010. "Outsourcing And Trade Imbalances: The United States–China Case," Pacific Economic Review, Wiley Blackwell, vol. 15(1), pages 56-70, February.
    22. Pravakar Sahoo & Ranjan Kumar Dash, 2017. "What Drives India's Surge in Service Exports?," The World Economy, Wiley Blackwell, vol. 40(2), pages 439-461, February.
    23. Ivan T. Kandilov & Thomas Grennes, 2010. "The determinants of service exports from Central and Eastern Europe," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 18(4), pages 763-794, October.
    24. Athukorala, Prema–Chandra & Menon, Jayant, 2010. "Global Production Sharing, Trade Patterns, and Determinants of Trade Flows in East Asia," Working Papers on Regional Economic Integration 41, Asian Development Bank.

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    More about this item

    Keywords

    Conflicting claims; Division rules; Operators; Minimal rights; Maximal claims; Duality; Convexity.;
    All these keywords.

    JEL classification:

    • C79 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Other
    • D63 - Microeconomics - - Welfare Economics - - - Equity, Justice, Inequality, and Other Normative Criteria and Measurement
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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