Mora, Jesse and Singh, Nirvikar (2012): Trade Productivity Upgrading, Trade Fragmentation, and FDI in Manufacturing: The Asian Development Experience.
Download (657Kb) | Preview
This paper examines the experience of 10 Asian countries with respect to growth, trade and FDI. It explores relationships between the nature of exports and imports and growth, as well as the relevance of FDI as a channel for these relationships. We find that FDI is often positively correlated with higher productivity levels in exports and imports. The effect for imports is particularly apparent for imported intermediate goods, reflecting the emergence of greater trade fragmentation. In turn, both imported intermediates and exports that are associated with higher productivity levels are positively correlated with per capita GDP. This paper therefore brings together empirical evidence that integrates discussions of FDI, trade fragmentation and improvements in the productivity of traded goods.
|Item Type:||MPRA Paper|
|Original Title:||Trade Productivity Upgrading, Trade Fragmentation, and FDI in Manufacturing: The Asian Development Experience|
|Keywords:||international trade, trade policy, product upgrading, trade fragmentation, vertical specialization, FDI and economic development|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development
O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy; Factor Movement Policy; Foreign Exchange Policy
F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade
O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences; Diffusion Processes
|Depositing User:||Jesse Mora|
|Date Deposited:||06. Mar 2012 11:35|
|Last Modified:||19. Feb 2013 16:36|
Alfaro, Laura and Eliza Hammel, “Capital Flows and Capital Goods,” Journal of International Economics, 72, pp. 128-150, 2007.
Blonigen, Bruce A. “In Search of Substitution Between Foreign Production and Exports.” Journal of International Economics, Vol. 53 (February 2001), pp. 81-104.
Borensztein, E., J. De Gregorio, J.-W. Lee, “How does foreign direct investment affect economic growth?” Journal of International Economics, 45, pp. 115-135, 1998.
Dean, Judith, K.C. Fung, Zhi Wang. “How Vertically Specialized is Chinese Trade?” U.S. International Trade Commission, Office of Economics Working Paper No. 2008-09-D, September 2008.
Dean, Judith, Mary E. Lovely, and Jesse Mora, “Decomposing China-Japan-U.S. Trade: Vertical Specialization, Ownership, and Organizational Form,” Journal of Asian Economics, v20, pp. 596-610, 2009. Eaton, Jonathan and Samuel Kortum, “Trade in capital goods.” European Economic Review, 45, pp. 1195–1235, 2001. Feenstra, Robert, Robert Lipsey, Haiyand Deng, Alyson Ma, and Hengyong Mo. “World Trade Flows: 1962-2000.” NBER Working Paper 11040, January 2005.
Goldberg, P., A. Khandelwal, N. Pavcnik and P. Topalova, “Imported Intermediate Inputs and Domestic Product Growth: Evidence from India,” Quarterly Journal of Economics, 125(4), 2010, pp. 1727-67.
Hausmann, Ricardo, Jason Hwang, and Dani Rodrik. “What You Export Matters.” Journal of Economic Growth, 12(1), pp. 1-25, 2007.
Heston, Alan, Robert Summers and Bettina Aten, Penn World Table Version 7.0, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, May 2011.
Hummels, David, Jun Ishii, and Kei-Mu Yi. “The Nature and Growth of Vertical Specialization in World Trade.” Journal of International Economics 54, 2001.
Keller, Wolfgang, “International Trade, Foreign Direct Investment, and Technology Spillovers,” NBER Working Paper 15442, October 2009.
Lawrence, Robert, and David Weinstein, “Trade and Growth: Import-Led or Export-Led? Evidence from Japan and Korea,” in Joseph Stiglitz and Shahid Yusuf, eds., Rethinking the East Asian Miracle, Washington, DC: World Bank and Oxford University Press, 2001, pp. 379-408.
Linden, Greg, Jason Dedrick, and Kenneth Kraemer. "Innovation and Job Creation in a Global Economy: The Case of Apple's iPod." Journal of International Commerce and Economics, 3(1): 223-239, 2011.
Rodrik, Dani. “What’s So Special About China’s Exports?” China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(5), pages 1-19, 2006.
Saggi, Kamal, “Trade, Foreign Direct Investment and International Technology Transfer: A Survey,” World Bank Research Observer, 17 (2), 2002, 191-235.
Swenson, Deborah. “The Influence of Chinese Trade Policy on Automobile Assembly and Parts.” UC Davis Working Paper, October 2011. Urata, Shujiro, “Emergence of an FDI-Trade Nexus and Economic Growth in East Asia,” in Joseph Stiglitz and Shahid Yusuf, eds., Rethinking the East Asian Miracle, Washington, DC: World Bank and Oxford University Press, 2001, pp. 409-461.
Yi, Kei-Mu. “Can Vertical Specialization Explain the Growth of World Trade?” Journal of Political Economy, 111(1): 52–102. 2003.