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Formation of production networks in ASEAN: Measuring the real value-added and identifying the role of ASEAN countries in the world supply chains

Miguel Angel Esquivias (), Dyah Wulan Sari and Rossanto Dwi Handoyo

Business and Economic Horizons (BEH), 2017, vol. 13, issue 2

Abstract: This study addresses the two-fold question of whether the integration-liberalization process of ASEAN is headed towards the creation of a single production base region, and how ASEAN links with other trade blocks. It looks into the degree of intra-ASEAN and extra-ASEAN vertical integration vis-à-vis North America, East Asia, and the European Union through the measurement of value-added creation-absorption in global value chains (GVC) and by locating ASEAN within vertical structures. The study employs an international input-output database and breaks up gross exports into different components of value-added using data from 1997, 2004, and 2012. ASEAN has made significant gains in integrating with East Asia. However, ASEAN as a single production region has gained little, and even lost share in value-added trade with NAFTA and Europe. The truth is that ASEAN has a stronger role across the GVC as a supplier of intermediate goods (33%) than as a supplier of final goods (30%). Vertical structures represent more than 43% of ASEAN gross exports, but it still depends on foreign parts and components (35%) to produce its exports. It may be argued that ASEAN + 6, which entails a wider scope of integration, might offer larger benefits to the ASEAN project.

Keywords: Industrial Organization; International Relations/Trade (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pdcbeh:264697

DOI: 10.22004/ag.econ.264697

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