Understanding the Flow of Electronic Parts and Components in East Asia

Willem Thorbecke

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: This paper investigates East Asia's exploding trade in electronic parts and components (ep&c). The results indicate that foreign direct investment (FDI) increases the level of ep&c exports. Thus, FDI has promoted the slicing up of the value chain in the region. Higher capital intensity increases the share of a country's ep&c exports relative to its Asian trading partners. Thus, one reason why South Korea and Taiwan have gained market share is because they have invested heavily in plant, equipment, and technology. Exchange rate depreciations significantly increase both the level and the share of a country's ep&c exports. This implies that regional exchange rate stability may reduce beggar-thy-neighbor policies and promote intra-regional trade.

Pages: 26 pages
Date: 2016-06
New Economics Papers: this item is included in nep-ger and nep-int
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:16072

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