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Trade Productivity Upgrading, Trade Fragmentation, and FDI in Manufacturing: The Asian Development Experience

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  • Mora, Jesse
  • Singh, Nirvikar

Abstract

This paper examines the experience of 10 Asian countries with respect to growth, trade and FDI. It explores relationships between the nature of exports and imports and growth, as well as the relevance of FDI as a channel for these relationships. We find that FDI is often positively correlated with higher productivity levels in exports and imports. The effect for imports is particularly apparent for imported intermediate goods, reflecting the emergence of greater trade fragmentation. In turn, both imported intermediates and exports that are associated with higher productivity levels are positively correlated with per capita GDP. This paper therefore brings together empirical evidence that integrates discussions of FDI, trade fragmentation and improvements in the productivity of traded goods.

Suggested Citation

  • Mora, Jesse & Singh, Nirvikar, 2012. "Trade Productivity Upgrading, Trade Fragmentation, and FDI in Manufacturing: The Asian Development Experience," MPRA Paper 37127, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:37127
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    Cited by:

    1. Yunling Zhang & Rongyan Wang, 2014. "The role of foreign direct investment flows and a possible multilateral agreement," Chapters, in: Richard Baldwin & Masahiro Kawai & Ganeshan Wignaraja (ed.), A World Trade Organization for the 21st Century, chapter 13, pages 403-420, Edward Elgar Publishing.
    2. KARGI, Bilal, 2014. "Portfolio in Turkish Economy, and A Long Termed Relation Between Foreign Direct Investments and The Growth, and The Structural Breakage Analysis (1980-2012)," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 6(1), pages 70-81.
    3. Richard Baldwin & Masahiro Kawai & Ganeshan Wignaraja (ed.), 2014. "A World Trade Organization for the 21st Century," Books, Edward Elgar Publishing, number 15991.

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    More about this item

    Keywords

    international trade; trade policy; product upgrading; trade fragmentation; vertical specialization; FDI and economic development;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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