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East Asian Production Networks Go Beyond the Gravity Prediction

Author

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  • Mitsuyo Ando
  • Fukunari Kimura
  • Kenta Yamanouchi

Abstract

This paper provides empirical evidence that supports the continuing importance of machinery international production networks (IPNs) in East Asia. We first confirm their robustness and resilience, even during the coronavirus disease (COVID-19) pandemic, as well as the significance of East Asian countries as suppliers of machinery final products and parts and components for the world. Then, we demonstrate how deeply East Asian countries are committed to machinery IPNs by applying a gravity equation to pre-pandemic bilateral machinery trade and comparing actual values with fitted values of the estimated equation. The gravity estimation exercise indicates that machinery trade is basically regional-within Factory Asia, Factory North America, and Factory Europe-but Factory Asia also has strong inter-regional linkages. It also verifies that ASEAN has played an important role in Factory Asia, going far beyond the gravity prediction, for the development of machinery IPNs.

Suggested Citation

  • Mitsuyo Ando & Fukunari Kimura & Kenta Yamanouchi, 2022. "East Asian Production Networks Go Beyond the Gravity Prediction," Asian Economic Papers, MIT Press, vol. 21(2), pages 78-101, Summer.
    • Handle: RePEc:tpr:asiaec:v:21:y:2022:i:2:p:78-101
    DOI: 10.1162/asep_a_00852
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    Cited by:

    1. Mitsuyo Ando & Kazunobu Hayakawa & Fukunari Kimura, 2024. "Supply Chain Decoupling: Geopolitical Debates and Economic Dynamism in East Asia," Asian Economic Policy Review, Japan Center for Economic Research, vol. 19(1), pages 62-79, January.
    2. Kozo Kiyota, 2023. "The COVID-19 Pandemic and World Machinery Trade Network," Working Papers DP-2023-10, Economic Research Institute for ASEAN and East Asia (ERIA).

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