Globalization and Country-Specific Service Links

Stephen Golub, Ronald Jones and Henryk Kierzkowski
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Henryk Kierzkowski: Graduate Institute of International Studies, Geneva

No 532, RCER Working Papers from University of Rochester - Center for Economic Research (RCER)

Abstract: The Jones-Kierzkowski model of global fragmentation of production draws attention to the cost and efficiency of “service links” connecting “production blocks” in different countries. Country-specific service links include transport and telecommunications infrastructure and the overall business climate. Mobile factors of production, most prominently foreign direct investment (FDI), can shop around for countries with the most functional and inexpensive service links along with low labor costs. Those countries with favorable business climates and well-functioning service links are able to attract FDI and other mobile inputs, and participate in international production networks. We provide evidence that successful exporters of manufactures, notably in East Asia, have relatively favorable service links. A cross-section analysis of manufactured exports and of FDI in manufacturing confirms the importance of service link infrastructure.

Keywords: Conflicting claims; Division rules; Operators; Minimal rights; Maximal claims; Duality; Convexity. (search for similar items in EconPapers)
JEL-codes: C79 D63 D74 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2007-01
New Economics Papers: this item is included in nep-sea
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Citations: View citations in EconPapers (29)

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Journal Article: Globalization and Country‐Specific Service Links (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:roc:rocher:532

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