By Daisuke Hiratsuka (eds.)
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Extra resources for East Asia’s De Facto Economic Integration
Example text
However, Fontagné and Freudenberg (1997) underlined the shortcomings of this methodology, and proposed a new methodology based on Abd-El-Rahman (1986). Recent studies have used this method (Fontagné et al. 1997; Fukao et al. 2003). Flows are classified in three categories: one-way trade (OWT), two-way trade horizontally differentiated (TWTH), and two- Intra-Industry Trade and Economic Integration 37 way trade vertically differentiated (TWTV). 1). 25). Remaining flows are classified as horizontally differentiated.
Intra- 24 East Asia’s De Facto Economic Integration industry trade with large differentials in export and import unit prices, is rapidly increasing. e. 6 This means that vertical intra-industry trade in East Asia is mainly due not to vertical product differentiation but rather to production-process-wise division of labor. An analysis of the behavior of Japanese firm affiliates in East Asia suggests that arm’s-length transactions instead of intra-firm transactions increase the share in international production/distribution networks.
And Kierzkowski, H. (2001) Global Production and Trade in East Asia, Boston: Kluwer Academic Publishers. Deardorff, A. V. (2001) “Fragmentation in Simple Trade Models,” North American Journal of Economics and Finance, 12: 121–37. Fontagne, Lionel and Freudenberg, Michael (2002) “Long-term Trends in Intra-industry Trade,” in Frontiers of Research in Intra-industry Trade, ed. P. J. Lloyd and Hyun-Hoon Lee, Basingstoke and New York: Palgrave Macmillan. , Krugman, P. R. and Venables, A. J. (1999) The Spatial Economy: Cities, Regions, and International Trade, Cambridge, Mass: MIT Press.