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Product sophistication: A tie that binds partners in international production sharing

David Córcoles (), Carmen Diaz-Mora and Rosario Gandoy ()
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Rosario Gandoy: University of Castilla-La Mancha

No 13-03, Working Papers from Asociación Española de Economía y Finanzas Internacionales

Abstract: This paper focuses on the role of product sophistication in determining the permanence in international production networks. The probability of remaining in the global production chains in a changing and unstable competitive environment is expected to be higher for suppliers that provide the most sophisticated goods, i.e. goods that incorporate the most advanced economies’ capabilities. In order to check this hypothesis we use discrete time duration model. Our estimates indicate that, indeed, the risk of being removed from production networks decreases not only with the complexity of the products, but also with the reduction of uncertainty in production and trade relationships and with the degree of integration in these international-scale networks.

Keywords: Product sophistication; International Production Networks; Export Survival; Time-Discrete Duration Models (search for similar items in EconPapers)
JEL-codes: F10 F14 C41 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2013-03
New Economics Papers: this item is included in nep-cwa
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