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GVC journeys: Industrialisation and deindustrialisation in the age of the second unbundling

Richard Baldwin and Toshihiro Okubo

Journal of the Japanese and International Economies, 2019, vol. 52, issue C, 53-67

Abstract: Offshoring and participation in global value chains (GVCs) are critical to understanding the rapid deindustrialisation of G7 nations and the rapid industrialisation of a handful of developing nations. This paper distinguishes between trade in final goods and trade in parts to track the shifting pattern of the location of manufacturing. We introduce a simple empirical measure of comparative advantage in parts on one hand and in final goods on the other. We illustrate how this distinction can help organise thinking on the patterns of industrialisation and deindustrialisation—namely the ‘GVC journeys’ of advanced and emerging economies. We also provide one simple model. The model highlights the interactions of trade costs and the knowledge transfers to accompany offshoring of parts production and assembly, which we call trade-led versus knowledge-led globalisation.

Keywords: Globalisation; Knowledge-led globalisation; Parts and components trade; Fragmentation (search for similar items in EconPapers)
JEL-codes: F10 F20 F60 (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (15)

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Working Paper: GVC journeys: Industrialisation and Deindustrialisation in the Age of the Second Unbundling (2019) Downloads
Working Paper: GVC journeys: Industrialisation and Deindustrialisation in the Age of the Second Unbundling (2019) Downloads
Chapter: GVC Journeys: Industrialisation and Deindustrialisation in the Age of the Second Unbundling (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:52:y:2019:i:c:p:53-67

DOI: 10.1016/j.jjie.2019.02.003

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