Product Fragmentation and Trade Patterns in East Asia

Prema-chandra Athukorala

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: product fragmentation - the cross-border dispersion of component production/assembly within vertically integrated production processes - is an important feature of the deepening structural interdependence of the world economy. This paper examines the implications of this phenomenon for global and regional trade patterns, with special emphasis on countries in East Asia, using a new data set culled from the UN trade database. It is found that, while 'fragmentation trade' has generally grown faster than total world trade in manufacturing, the degree of dependence of East Asia on this new form of international specialisation is proportionately larger compared to North America and Europe. The upshot is that international product fragmentation has made the East Asian growth dynamism increasingly reliant on extra-regional trade, strengthening the case for a global, rather than a regional, approach to trade and investment policymaking.

Keywords: product fragmentation; globalisation; multinational enterprises (search for similar items in EconPapers)
JEL-codes: F23 O53 (search for similar items in EconPapers)
Pages: 69 pages
Date: 2003-10
New Economics Papers: this item is included in nep-dev and nep-sea
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Citations: View citations in EconPapers (20)

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Journal Article: Product Fragmentation and Trade Patterns in East Asia (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2003-21

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