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Production fragmentation, upstreamness, and value-added : evidence from factory Asia 1990-2005

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  • Ito, Tadashi
  • Vezina, Pierre-Louis

Abstract

We exploit the recent release of the 2005 Asian Input-Output Matrix to dress a picture of the geographic fragmentation of value added in Factory Asia from 1990 to 2005. We document 3 stylized facts. The first is that the average share of foreign value added embedded in production rose by about 7 percentage points between 1990 and 2005, from 9% to 16%. The second is that, contrary to popular belief, China's production embeds a smaller share of foreign value added than other Factory Asia countries'. Between 1990 and 2005 among Factory Asia countries China grew most after Japan as a source of value added to other countries' production. Third, country-industries at the upstream and downstream extremities of the supply chain embed a smaller share of foreign value added than those with intermediate levels of upstreamness.

Suggested Citation

  • Ito, Tadashi & Vezina, Pierre-Louis, 2015. "Production fragmentation, upstreamness, and value-added : evidence from factory Asia 1990-2005," IDE Discussion Papers 535, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    • Handle: RePEc:jet:dpaper:dpaper535
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    References listed on IDEAS

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    Cited by:

    1. João Amador & Sónia Cabral & Rossana Mastrandrea & Franco Ruzzenenti, 2018. "Who’s Who in Global Value Chains? A Weighted Network Approach," Open Economies Review, Springer, vol. 29(5), pages 1039-1059, November.
    2. Ketan Reddy & Subash Sasidharan, 2021. "A Portrait of Global Value Chain Linkages of Indian Manufacturing," Journal of Asian Economic Integration, , vol. 3(2), pages 235-250, September.
    3. OKUBO Toshihiro & SASAHARA Akira, 2022. "A Long-run Transition of Japan's Inter-regional Value Chains," Discussion papers 22067, Research Institute of Economy, Trade and Industry (RIETI).
    4. Theresa M. Greaney & Kozo Kiyota, 2020. "The gravity model and trade in intermediate inputs," The World Economy, Wiley Blackwell, vol. 43(8), pages 2034-2049, August.
    5. Marília Bassetti Marcato, 2023. "Regional Dynamics in Global Production Sharing: Evidence from “Factory South America”," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 35(5), pages 1173-1196, October.
    6. Tadashi Ito, 2020. "Production Networks and “The Great Convergence”," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 16(1), pages 73-94, February.
    7. Zhaobin Fan & Sajid Anwar & Ying Zhou, 2023. "Deep trade agreements, production position distance and bilateral global value chain participation," The World Economy, Wiley Blackwell, vol. 46(12), pages 3596-3615, December.
    8. Sasahara, Akira, 2019. "Explaining the employment effect of exports: Value-added content matters," Journal of the Japanese and International Economies, Elsevier, vol. 52(C), pages 1-21.
    9. Kenji Suganuma, 2016. "Upstreamness in the Global Value Chain: Manufacturing and Services," IMES Discussion Paper Series 16-E-02, Institute for Monetary and Economic Studies, Bank of Japan.
    10. Meng, Bo & Ye, Ming, 2022. "Smile curves in global value chains: Foreign- vs. domestic-owned firms; the U.S. vs. China," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 15-29.
    11. Coveri, Andrea & Paglialunga, Elena & Zanfei, Antonello, 2024. "Global value chains and within-country inequality: The role of functional positioning," Structural Change and Economic Dynamics, Elsevier, vol. 70(C), pages 382-397.
    12. Halit Yanikkaya & Abdullah Altun & Pınar Tat, 2023. "Once again “smile curve”: Is chain upgrading possible?," Review of Development Economics, Wiley Blackwell, vol. 27(1), pages 62-88, February.
    13. Yang, Yiwen & Lin, Chinho, 2021. "Impact of the “Belt and Road Initiative” on machinery production networks," Economic Modelling, Elsevier, vol. 104(C).

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    More about this item

    Keywords

    Asia; China; International economic relations; International trade; Industry; Factory Asia; Supply chains; Upstreamness;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration

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