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Development and Restructuring of Regional Production/Distribution Networks in East Asia

In: Moving Toward A New Development Model For East Asia-The Role of Domestic Policy and Regional Cooperation

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  • Mitsuyo Ando

Abstract

This chapter attempts to investigate the features of development and restructuring patterns of production/distribution networks in East Asia, mainly in machinery sectors, using international trade data at the most disaggregated level, to discuss their resilient nature, and to provide policy implications for the regional production networks and the economic development in the region. Although the negative impacts of the Global Financial Crisis (GFC) in 2008 were initially transmitted through the networks, the production/distribution networks in East Asia rather revealed their resilient nature. Our empirical analysis demonstrates that intra-regional machinery trade has been enhanced and contributed as a source of quick recovery from the GFC, and that the restructuring of regional production/distribution networks has been accelerated with the GFC as a trigger. Our study on trade patterns in terms of extensive margins also demonstrates clearly how the extent and depth of regional production networks have been changing, particularly after the GFC. Based on our empirical investigation, we discuss challenges and policy implication for the further development of the production networks and economic development and integration in the region.

Suggested Citation

  • Mitsuyo Ando, . "Development and Restructuring of Regional Production/Distribution Networks in East Asia," Chapters, in: Zhang Yunling & Fukunari Kimura & Sothea Oum (ed.), Moving Toward A New Development Model For East Asia-The Role of Domestic Policy and Regional Cooperation, chapter 12, pages 367-392, Economic Research Institute for ASEAN and East Asia (ERIA).
    • Handle: RePEc:era:chaptr:2011-rpr-10-12
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    File URL: http://www.eria.org/RPR_FY2011_No.10_Chapter_12.pdf
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    References listed on IDEAS

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    1. Simon J.Evenett & Mia Mikic & Ravi Ratnayake (ed.), 2011. "Trade-led growth: A sound strategy for Asia," ARTNeT Books and Research Reports, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), number brr10.
    2. Mitsuyo Ando & Fukunari Kimura, 2005. "The Formation of International Production and Distribution Networks in East Asia," NBER Chapters, in: International Trade in East Asia, pages 177-216, National Bureau of Economic Research, Inc.
    3. Obashi, Ayako, 2010. "Stability of production networks in East Asia: Duration and survival of trade," Japan and the World Economy, Elsevier, vol. 22(1), pages 21-30, January.
    4. Alan V. Deardorff, 2011. "Fragmentation in simple trade models," World Scientific Book Chapters, in: Robert M Stern (ed.), Comparative Advantage, Growth, And The Gains From Trade And Globalization A Festschrift in Honor of Alan V Deardorff, chapter 16, pages 165-181, World Scientific Publishing Co. Pte. Ltd..
    5. Ayako Obashi, 2011. "Resiliency of production networks in Asia: Evidence from the Asian crisis," STUDIES IN TRADE AND INVESTMENT, in: Trade-led growth: A sound strategy for Asia, chapter 3, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    6. Ando, Mitsuyo, 2006. "Fragmentation and vertical intra-industry trade in East Asia," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 257-281, December.
    7. Kimura, Fukunari & Ando, Mitsuyo, 2005. "Two-dimensional fragmentation in East Asia: Conceptual framework and empirics," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 317-348.
    8. Mitsuyo ANDO, 2010. "Machinery Trade in East Asia, and the Global Financial Crisis," Working Papers DP-2010-10, Economic Research Institute for ASEAN and East Asia (ERIA).
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