East Asia's Economic Development cum Trade "Divergence"

Ishido Hikari

No 11, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This paper addresses some salient features of how some of "successful" East Asian economies have been faring in terms of enhancing their export competitiveness. That export becomes more divergent in terms of its unit price as more technology-enhancing economic activity is undertaken within an economy, is the primary message that this study conveys. This is indeed what Schumpeter had addressed in conjunction with his "creative destruction" thesis. From this perspective, East Asia's export-led industrialization has been attained through a particular policy focus upon high "trade divergence" sectors underpinned by a generally high level of manufacturing flexibility. The experience of Malaysia's development serves as the strong case in point. As an East Asia-wide FTA is expected to facilitate "divergent" export-led industrialization through enhanced knowledge interaction, this dynamic or "divergent" impact that knowledge creation could exert should come to the fore of relevant policy arguments, together with static consideration of trade creation and diversion. A formal statistical test of the "divergence hypothesis" above is called for with a view to building upon this preliminary study.

Keywords: International trade; Trade policy; International competition; Exports; Asia; East Asia; 貿易; 貿易政策; 国際競争力; 輸出; アジア; 東アジア (search for similar items in EconPapers)
JEL-codes: F10 F13 O10 (search for similar items in EconPapers)
Date: 2004-10-01
New Economics Papers: this item is included in nep-int and nep-sea
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 11. 2004-10-01

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