An Alternative Measurement for International Fragmentation of the Production Process: An International Input–Output Approach

Satoshi Inomata

Chapter 5 in Uncovering Value Added in Trade:New Approaches to Analyzing Global Value Chains, 2015, pp 81-99 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This chapter investigates the possibility of constructing an alternative measurement for analyzing the international fragmentation of the production process. It asserts that current usage of relevant information, whether trade shares of parts and components or the index of vertical specialization, is unsatisfactory for measuring the phenomenon, since they critically lack an overall perspective of the entire structure of production chains. A new measurement is formulated that captures every aspect of the vertical sequence of production linkages. It is based on the input–output model of average propagation lengths, which shows the average number of production stages that are passed through for an exogenous change in one industry to affect another. By applying this model to the Asian International Input–Output data, we are able to measure the international dimension of production sharing and division of labor in East Asia.

Keywords: Trade; Global Value Chains; Production Networks; Input-output Method; Trade Statistics; Trade Measurement; Trade in Value-Added; Domestic Value-Added; Production Fragmentation; Global Assembly; Trade Relations; Foreign Direct Investment; Manufacturing (search for similar items in EconPapers)
Date: 2015
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