IDEAS home Printed from https://ideas.repec.org/a/tpr/asiaec/v7y2008i3p101-124.html
   My bibliography  Save this article

Offshoring and Trade in East Asia: A Statistical Analysis

Author

Listed:
  • Ryuhei Wakasugi

    (Institute of Economic Research, Kyoto University, Yoshida-honmachi, Sakyo-ku, Kyoto 606-8501, Japan.)

  • Banri Ito

    (Research Institute of Economy, Trade, and Industry, 1-4-2 Kasumigaseki Chiyodaku, Tokyo 100-0013, Japan.)

  • Eiichi Tomiura

    (Department of Economics, Yokohama National University, 79-4 Tokiwa-dai, Hodogaya-ku, Yokohama City 240-8501, Japan.)

Abstract

Japanese shares of export and manufacturing value-added in the global market have declined significantly, whereas those in China have risen sharply. This paper examines how recent increases in offshoring by Japanese firms relates to the changes in the composition of export, the structure of national production, and the international distribution of manufacturing value-added in Japan, China, East Asian countries, the United States, and European countries, on the basis of our original survey of Japanese firm's offshoring and the statistics of export and manufacturing production of these countries. It also discusses how the net cost saving of offshoring due to wage differentials and institutional factors will affect the sustainability of Japanese offshoring. (c) 2008 The Earth Institute at Columbia University and the Massachusetts Institute of Technology.

Suggested Citation

  • Ryuhei Wakasugi & Banri Ito & Eiichi Tomiura, 2008. "Offshoring and Trade in East Asia: A Statistical Analysis," Asian Economic Papers, MIT Press, vol. 7(3), pages 101-124, Fall.
    • Handle: RePEc:tpr:asiaec:v:7:y:2008:i:3:p:101-124
    as

    Download full text from publisher

    File URL: http://www.mitpressjournals.org/doi/pdfplus/10.1162/asep.2008.7.3.101
    File Function: link to full text
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    2. Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 569-600.
    3. Baldwin, Richard & Robert-Nicoud, Frédéric, 2007. "Offshoring: General Equilibrium Effects on Wages, Production and Trade," CEPR Discussion Papers 6218, C.E.P.R. Discussion Papers.
    4. Robert C. Feenstra & Gordon H. Hanson, 2005. "Ownership and Control in Outsourcing to China: Estimating the Property-Rights Theory of the Firm," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 729-761.
    5. Pol Antràs, 2005. "Incomplete Contracts and the Product Cycle," American Economic Review, American Economic Association, vol. 95(4), pages 1054-1073, September.
    6. Gene M. Grossman & Esteban Rossi-Hansberg, 2008. "Trading Tasks: A Simple Theory of Offshoring," American Economic Review, American Economic Association, vol. 98(5), pages 1978-1997, December.
    7. Hans‐Werner Sinn, 2006. "The Pathological Export Boom and the Bazaar Effect: How to Solve the German Puzzle," The World Economy, Wiley Blackwell, vol. 29(9), pages 1157-1175, September.
    8. Kei-Mu Yi, 2003. "Can Vertical Specialization Explain the Growth of World Trade?," Journal of Political Economy, University of Chicago Press, vol. 111(1), pages 52-102, February.
    9. Pol Antràs, 2003. "Firms, Contracts, and Trade Structure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1375-1418.
    10. Pol Antras & Elhanan Helpman, 2004. "Global Sourcing," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 552-580, June.
    11. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    12. Pol Antràs & Elhanan Helpman, 2006. "Contractual Frictions and Global Sourcing," NBER Working Papers 12747, National Bureau of Economic Research, Inc.
    13. Pol Antràs, 2005. "Property Rights and the International Organization of Production," American Economic Review, American Economic Association, vol. 95(2), pages 25-32, May.
    14. repec:hrv:faseco:4784029 is not listed on IDEAS
    15. ITO Banri & TOMIURA Eiichi & WAKASUGI Ryuhei, 2007. "Dissecting Offshore Outsourcing and R&D: A Survey of Japanese Manufacturing Firms," Discussion papers 07060, Research Institute of Economy, Trade and Industry (RIETI).
    16. Tomiura, Eiichi, 2007. "Foreign outsourcing, exporting, and FDI: A productivity comparison at the firm level," Journal of International Economics, Elsevier, vol. 72(1), pages 113-127, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Masahisa Fujita & Nobuaki Hamaguchi, 2012. "Japan and economic integration in East Asia: post-disaster scenario," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 48(2), pages 485-500, April.
    2. KWON Hyeog Ug, 2012. "Offshoring of Japanese Small and Medium Enterprises (Japanese)," Discussion Papers (Japanese) 12004, Research Institute of Economy, Trade and Industry (RIETI).
    3. Françoise Lemoine, 2010. "Past Successes and New Challenges: China's Foreign Trade at a Turning Point," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 18(3), pages 1-23, May.
    4. Françoise Lemoine, 2013. "From foreign trade to international investment: a new step in China’s integration with the world economy," Economic Change and Restructuring, Springer, vol. 46(1), pages 25-43, March.
    5. Kozo Kiyota & Sawako Maruyama, 2018. "On the Demand for Female Workers in Japan: The Role of ICT and Offshoring," Asian Economic Papers, MIT Press, vol. 17(2), pages 25-46, Summer.
    6. Ogawa, Kazuo & Saito, Mika & Tokutsu, Ichiro, 2017. "Did divine wind rescue Japan out of the lost decade?," Journal of the Japanese and International Economies, Elsevier, vol. 44(C), pages 39-51.
    7. Mr. Ichiro Tokutsu & Mr. Kazuo Ogawa & Mika Saito, 2012. "Japan out of the Lost Decade: Divine Wind or Firms’ Effort?," IMF Working Papers 2012/171, International Monetary Fund.
    8. Lurong Chen & Philippe De Lombaerde & Ludo Cuyvers, 2017. "Markets Matter: The Potential of Intra-Regional Trade in ASEAN and Its Implications for Asian Regionalism," Asian Economic Papers, MIT Press, vol. 16(2), pages 1-19, Summer.
    9. Tomeczek, Artur F., 2022. "The evolution of Japanese keiretsu networks: A review and text network analysis of their perceptions in economics," Japan and the World Economy, Elsevier, vol. 62(C).
    10. Judith M. Dean & Mary E. Lovely & Jesse Mora, 2017. "Decomposing China-Japan-U.S. Trade: Vertical specialization, ownership, and organizational form," World Scientific Book Chapters, in: Mary E Lovely (ed.), International Economic Integration and Domestic Performance, chapter 7, pages 119-132, World Scientific Publishing Co. Pte. Ltd..
    11. Matthew Cole & Robert Elliott & Toshihiro Okubo, 2014. "International environmental outsourcing," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(4), pages 639-664, November.
    12. OGAWA Kazuo & TOKUTSU Ichiro, 2015. "Hysteresis in Japanese Export Market: A Dynamic Random-Effect Probit Approach to Panel Data of Japanese Machinery-manufacturing Firms," Discussion papers 15031, Research Institute of Economy, Trade and Industry (RIETI).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Karpaty, Patrik & Tingvall, Patrik Gustavsson, 2011. "Offshoring of Services and Corruption: Do Firms Escape Corrupt Countries?," Working Paper Series in Economics and Institutions of Innovation 243, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    2. TOMIURA Eiichi & ITO Banri & WAKASUGI Ryuhei, 2008. "Cross-regional Variations in Offshore Outsourcing Choices: Evidence from Firm-level Data," Discussion papers 08029, Research Institute of Economy, Trade and Industry (RIETI).
    3. Alireza Naghavi & Gianmarco Ottaviano, 2009. "Firm Heterogeneity, Contract Enforcement, and the Industry Dynamics of Offshoring," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 629-653, December.
    4. Juan Carluccio & Thibault Fally, 2012. "Global Sourcing under Imperfect Capital Markets," The Review of Economics and Statistics, MIT Press, vol. 94(3), pages 740-763, August.
    5. Defever, Fabrice & Toubal, Farid, 2013. "Productivity, relationship-specific inputs and the sourcing modes of multinationals," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 345-357.
    6. Marcella Nicolini, 2007. "Institutions and Offshoring Decision," CESifo Working Paper Series 2074, CESifo.
    7. Pol Antràs & Robert W. Staiger, 2012. "Offshoring and the Role of Trade Agreements," American Economic Review, American Economic Association, vol. 102(7), pages 3140-3183, December.
    8. Arnaud Costinot & Lindsay Oldenski & James Rauch, 2011. "Adaptation and the Boundary of Multinational Firms," The Review of Economics and Statistics, MIT Press, vol. 93(1), pages 298-308, February.
    9. Schwarz, Christian & Suedekum, Jens, 2014. "Global sourcing of complex production processes," Journal of International Economics, Elsevier, vol. 93(1), pages 123-139.
    10. Fabrice Defever & Farid Toubal, 2007. "Productivity and the Sourcing Modes of Multinational Firms: Evidence from French Firm-Level Data," CEP Discussion Papers dp0842, Centre for Economic Performance, LSE.
    11. Antrà s, Pol & Yeaple, Stephen R., 2014. "Multinational Firms and the Structure of International Trade," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 55-130, Elsevier.
    12. Pol Antràs & Esteban Rossi-Hansberg, 2009. "Organizations and Trade," Annual Review of Economics, Annual Reviews, vol. 1(1), pages 43-64, May.
    13. Eppinger, Peter S. & Kukharskyy, Bohdan, 2017. "Contracting institutions and firm boundaries," University of Tübingen Working Papers in Business and Economics 100, University of Tuebingen, Faculty of Economics and Social Sciences, School of Business and Economics.
    14. Pol Antràs & Elhanan Helpman, 2006. "Contractual Frictions and Global Sourcing," NBER Working Papers 12747, National Bureau of Economic Research, Inc.
    15. Pol Antràs, 2014. "Grossman–Hart (1986) Goes Global: Incomplete Contracts, Property Rights, and the International Organization of Production," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(suppl_1), pages 118-175.
    16. Ma, Yue & Qu, Baozhi & Zhang, Yifan, 2010. "Judicial quality, contract intensity and trade: Firm-level evidence from developing and transition countries," Journal of Comparative Economics, Elsevier, vol. 38(2), pages 146-159, June.
    17. Elhanan Helpman, 2006. "Trade, FDI, and the Organization of Firms," Journal of Economic Literature, American Economic Association, vol. 44(3), pages 589-630, September.
    18. Kukharskyy, Bohdan, 2016. "Relational contracts and global sourcing," Journal of International Economics, Elsevier, vol. 101(C), pages 123-147.
    19. Valeria Gattai, 2013. "International outsourcing versus FDI under contractual incompleteness," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), vol. 60(2), pages 157-186, June.
    20. Rosario Crinò, 2009. "Offshoring, Multinationals And Labour Market: A Review Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 197-249, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tpr:asiaec:v:7:y:2008:i:3:p:101-124. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kelly McDougall (email available below). General contact details of provider: https://direct.mit.edu/journals .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.