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The Asian trade network is increasingly fragmented, resulting in higher dependence on supplies of goods and services from neighbouring countries. The update OECD Input-Output and Bilateral Trade Databases allow us to examine the recent evolution of international trade networks involving ASEAN and East Asian countries at the 2-digit industry level....
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... The governments of these nations have been attempting to adopt free-trade policies, offer various investment incentives, develop infrastructure, and establish business service centers (Ueki, Motsuhiro, & Bhongmakapat, 2012;Thitisomboon, 2015). Moreover, the establishment in 2015 of the ASEAN Economic Community (AEC), which facilitates the movement of goods, services, investments, capital, and skills among ASEAN member countries, increased trade and investment among member countries and promoted and expanded regional production sharing and networking (Yamano et al., 2010;Mukherjee & Goyal, 2016). ASEAN countries have become an important marketplace, especially the CLMV region, which is currently receiving attention from global investors due to its abundance of low-cost labor and natural resources (Thitisomboon, 2015). ...
Today, many companies do not restrict their manufacturing activities to their home countries and are increasingly seeking new locations from which to operate cross-border production sharing. The location decisions involved in production fragmentation represent a strategic issue that has a significant impact on a company’s income and success. The location selection process considers many criteria, especially when the process involves international locations. Most criteria are difficult to assess precisely and quantitatively, and a rating scale may need to be employed. However, such scales, which are often based on linguistic variables, are not typically standardized across various decision-makers, making them dependent upon subjective judgments. To tackle such complications, fuzzy logic is adopted to reduce the uncertainties in group decision-making in such an environment. The purpose of this paper is to apply a fuzzy technique for order preference by similarity to ideal solution (fuzzy TOPSIS) regarding the locations to be used in the international production fragmentation of an electronics company located in Thailand. This paper first examines the important criteria influencing location decisions for international production fragmentation. Fuzzy set theory is then applied to manipulate linguistic vagueness, ambiguities, and imprecise information and knowledge in such a manner as to determine weights for multiple criteria. The significant criteria for international production fragmentation are then identified and ranked through expert judgments. The results reveal that skill and competency level of labor force, adequacy of energy and electricity, and taxation and tax incentives are the most important criteria. The potential locations are finally ranked based on their overall performances. The paper also provides implications for management practices in international operations in terms of critical location criteria, decision-making methods, and uncertain situations.
... Clearly, Portuguese income benefits the most from demand for inputs originated in Sweden, United States, and France, while it losses the most due to domestic demand for foreign inputs produced in Brazil, the Netherlands and, particularly, Spain. Taiwan 0internationally fragmented production; Amador and Cabral (2009)'s index of relative vertical specialization; Dullien (2010)'s index of relative importance of international trade of parts and components; Meng et al. (2010Meng et al. ( , 2011)'s index of re-exported imported intermediate goods; Ferrarini (2011)'s network trade index between a pair of countries; and Yamano et al. (2011)'s indexes of import content of exports, of re-exported exports in intermediates and of a given country's exports embedded in its trade partners' exports. Firstly, while the indexes proposed in this paper put two approaches (downstream and upstream) together, the indexes found in literature merely cover a downstream approach . ...
Published by The World Economy as 'Global value chains and inward foreign direct investment in the 2000s' - see DOI: 10.1111/twec.12660
... Related to these are papers on the measurement of trade in value added, examples including Escaith (2008); Maurer and Degain (2010); Timmer et al. (2011). Further there are a number of papers with a focus on the Asian production and trade network (recent examples include Meng and Inomata, 2009;Hiratsuka and Uchida, 2010;Yamano et al., 2010). ...
Based on recent approaches to measuring the factor content of trade when intermediates are traded we decompose value added trade and its components (capital and labor, as well as their subcomponents ICT and Non-ICT capital and educational attainment categories) distinguishing between various categories of domestic value added content of exports and imports. We add to the literature by simultaneously considering both exports and imports which allows one to focus on the patterns and dynamics of net value added trade and its components rather than vertical specialization patterns based on exports. Here we show that a country's trade balance in value added equals its trade balance in gross trade, which however does not hold in bilateral relationships or for factors of production. Empirically we present results of an application of the proposed decomposition method based on the recently compiled World Input-Output Database (WIOD) covering 40 countries and 35 industries over the period 1995-2006. We show that the domestic value added content of exports and the foreign value added content of bilateral trade dominates, but that the foreign or multilateral part is increasing over time. As an extension we consider country's performance with respect to the value of trade in particular production factors. Patterns of trade in net value added closely resemble net trade flows but there are distinct patterns when looking at individual factors. We show that the US is still a net exporter of high-educated labor.
... Other recent studies focus on measuring trade in value added between countries thus trying to measure how much of value added created in the production process in one country is exported thus 'netting out' the value already embodied in imported products and the extent of 'vertical specialization' or 'vertical integration' (Hummels et al., 2001; Daudin et al., 2011; Johnson and Noguera, 2012; Koopman et al., 2010), with an overview of these approaches provided by Meng and Yamano (2010). 1 Related to these are papers on the measurement of trade in value added, examples including (examples in- cluding Escaith, 2008; Maurer and Degain, 2010;). Further there are a number of papers with a focus on the Asian production and trade network (recent examples include Meng and Inomata, 2009; Hiratsuka and Uchida, 2010; Yamano et al., 2010; Dean et al., 2011). In the international trade literature this issue has been addressed in a similar way though having a different focus when measuring the factor content of trade flows. ...
Based on recent approaches measuring the factor content of trade when intermediates are traded this paper provides an approach to decompose the value added and factor (capital, high, medium and low educated labour) content of trade into foreign and domestic components. This adds to the literature by simultaneously considering both exports and imports allowing a focus on the patterns and changes of net trade and its components and generalizes the commonly applied vertical specialization measures based on exports only. It is further pointed out that a country’s trade balance in terms of value added content equals its trade balance in gross trade. Empirically, results of the proposed decomposition based on the recently compiled World Input-Output Database (WIOD) covering 40 countries and 35 industries over the period 1995-2009 are presented. The domestic value added content of exports tends to decrease over time, increasing again in the crisis. Splitting up by production factors, emerging economies tend to export relatively more capital and import labour in value terms, with the opposite pattern found for advanced economies. Splitting up labour by educational attainment the expected pattern of the advanced countries being relatively stronger net exporters of high-educated labor as compared to low-educated labour in value terms emerges. This provides a distinct view on the structure of trade deficits and surpluses across countries based on its factor content. Finally, it is shown that the role of services is more important than would be suggested by conventional trade statistics due to the value added created in service sectors for production of manufacturing exports.
... They also emphasize that the upstream production process of intermediate goods is relatively "resistant" to the influence of exogenous shocks compared with assembly processes. Following Hummels et al. (2001), Yamano et al. (2010) propose two alternative demand-driven indicators: capturing the share of vertical specialisation in a particular country relative to world exports (EPE) and the share of re-exported intermediate inputs relative to total intermediate exports supplied by a particular country (REI). Using the harmonized I-O tables of Asian countries, these indicators attempt to explain a position of a specific country in the fragmentation chain as well as the magnitude of participation in the international production network. ...
“Import content of exports”, based on Leontief’s demand-driven input-output model, has been widely used as an indicator to measure a country’s degree of participation in vertical specialisation trade. At a sectoral level, this indicator represents the share of inter-mediates imported by all sectors embodied in a given sector’s exported output. However, this indicator only reflects one aspect of vertical specialisation – the demand side. This paper discusses the possibility of using the input-output model developed by Ghosh to measure the vertical specialisation from the perspective of the supply side. At a sector level, the Ghosh type indicator measures the share of imported intermediates used in a sector’s production that are subsequently embodied in exports by all sectors. We estimate these two indicators of vertical specialisation for 47 selected economies for 1995, 2000, 2005 using the OECD’s harmonized input-output database. In addition, the potential biases of both indicators due to the treatment of net withdrawals in inventories, are also discussed.
This paper addresses the relation between international trade and employment in Portugal with regard to the labour content of trade in intermediates. It considers both the overall level of employment and labour disaggregated by skills (high-skill, medium-skill and low-skill). The assessment makes use of the newly developed internationally linked input-output (IO) database named World Input-Output Database (WIOD), complemented with the SocioEconomic Accounts (SEA) for skill-types of labour. The period analysed-1995-2009-is the longest possible taking into account the two databases used. The amount of labour required to produce imported intermediates (exported intermediates) is taken as a proxy to the job effect of downward (upward) embeddedness of the country into Global Value Chains (GVCs). We conclude that intermediates' exports are basically intensive in low-skilled labour although presenting a tendency to skill-upgrading during the period analysed, while intermediates' imports are proportionally much more intensive in skilled labour, predominantly of a medium skill level, an expected result in a country of an intermediate level of development. We also concluded that the estimated net labour content of jobs in trade in intermediates in the final year of the period analysed was globally negative in 51 thousand jobs. Main net losses were observed with Brazil, People's Republic of China and India, while main net gains were observed with Spain and France.
Este documento analiza la integración productiva entre la Argentina y el Brasil mediante la información provista por las matrices insumo-producto interpaís (ICIO, por sus siglas en inglés) de la OCDE. Al discriminar los intercambios de bienes y servicios intermedios de los finales, este tipo de matrices permite identificar las articulaciones productivas entre dos países con mayor precisión que a partir de las estadísticas de comercio exterior tradicionales. En este caso, el uso de matrices insumo-producto interpaís ha permitido identificar, entre otros aspectos relevantes de la relación bilateral, cuál es el patrón de especialización vertical generado entre la Argentina y el Brasil, cómo repercute el aumento de la producción y de las exportaciones de una economía en la otra (efectos multiplicadores), y cómo se manifiesta el avance de las economías asiáticas en la composición del comercio entre los dos países.
China's rebound happened relatively quickly owing to a large extent to timely macroeconomic policy responses to the crisis. Lagging somewhat behind China, most Southeast Asian countries have now entered the transition from recession to recovery. Some export-dependent Southeast Asian countries shifted their export destination to China to benefit from its early recovery. This switch of export destination to China illustrates China's important role in leading the recovery of the region. Enhancing regional macroeconomic co-operation would help reduce vulnerability of the region and ensure a sustained recovery. Regional macroeconomic co-operation remains at an early stage in Southeast Asia, but possibilities for further co-operation should be explored.
