Regional integration or disintegration in the world production network? Norihiko Yamano (OECD) and...
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Transcript of Regional integration or disintegration in the world production network? Norihiko Yamano (OECD) and...
Regional integration or disintegration in the world production network?
Norihiko Yamano (OECD) and
Bo Meng (IDE-JETRO/OECD)
May 2010
Outline
•How to measure Economic Integration ?•Measurement results of integration
indicators▫International specialisation?▫Trade partnership▫Production network▫<integration index by gravity model>
Data sources•Bilateral trade in goods and services•Input-output database (OECD & IDE)
Economic integrations?•Significant transformation of trade
network particularly in Asia-Pacific region in 1995-2005▫Less trade friction (transport cost, custom
union, ICT difusion)▫Substitution Complementary ▫International specialisation
•Geographically integrated?
Industry composition of traded goods• The world composition of traded goods
remained stable in mid 1990s to mid 2000s, e.g. Chemicals (10%11%), Transport eq. (12%11%), Comm equip (8%10%), Machinery (9%8%), Textile (8%6%), food (6%5%),
• On the other hands, leading export compositions have changed in many countries. The differentiation and specialisation in the manufacturing sectors are apparent in recent trade statistics
International specialisation(increased shares 1995-2006, more than 10% share of total exports)▫ Mining (ISIC 10-14) in CA, MX, BR, CL / RU / ▫ Textile (ISIC17-19) in IT▫ Chemicals (ISIC24) in US / BE,DE,ES,FR, GB / IN, KR,
SG, TW▫ Machinery (ISIC29) in CZ, FI, JP▫ Comm equip. (ISIC30) in MX / FI,HU / CN, MY, PH▫ Computing machinery (ISIC32) in CN, TW, KR, PH,
SG,TH▫ Motor vehicles (ISIC34) in US, BR / DE, FR, PL,HU,CZ /
JP, KR
•Emerging Asian: labor intensive -> assembly machinery
Inter and intra-regional trade•High intra regional trade in Europe
(major 22 EU members, 30% in 1995, 28% in 2005)
•While share of intra Asian trade flows (ASEAN+E.Asia+India+Oceania) increase (12% in 1995 15.1% in 2005), intra-NAFTA and Europe has decreased.
Counting the dominant partner links to identify the demand and supply hubs
•Demand hub (l) ▫Count the partners’ export link that
depends on country l’s economy at given threshold t
export (k,l) / Σl export (k,l) > t %
•Supply hub(k) ▫Count the partners’ import link that
depends on country l’s economy at given threshold t
import (k,l) / Σl import (k,l) > t %
Structural changes in demand hubs in Asia/Pacific (intermediate goods)
Single country based production fragmentation indicators
•Import contents of exports also well-known as vertical specialization (e.g. Hummels et al. 2001)
vs = Am(I-Ad)-1 Export
Am=import coefficient, Ad=domestic coefficient
Sliced by bilateral tradevsi
k = u Amk (I-Ad
k)-1 EXikExport of
jProduction at
jIntermediate
Import
VS related indicators (equations)• Import contents share of k’s exports (ICE)= (vs1k+vs2k+…+vsnk) / exk
<demand-side perspective, affected by country economic size>
• Induced exports by partner’s exports (EPE)=(vsk1+vsk2+…+vskn)/ (ex1+ ex2+…+ exn)
<supplier’s perspective>•Re-exported K’s intermediate exports (REI) =(vsk1+vsk2+…+vskn)/ (imd.exk1+imd.exk2+…
+imd.exkn)<supplier’s perspective>
VS related indicators (conceptual fig.)
P1
K
Exports
exk
vs1k
F
P2 Pn
vs2k
vsnk
… P1’s ICEvs f1
vs fn
Exports
S
P1 P2 Pn…
vss1
vsk2
Vssn
ex1
ex2
exn
F’s intermediate exports that are consumed in P1
Pn’s ICE
F’s intermediate exports that are consumed in Pn
…
imd.exfn=intermediate exports from f to n
ICE EPE REI
Import contents of exports (ICE)by industry group
1995 2005 1995 2005 1995 2005 1995 2005
Australia 14% 14% 28% 25% 16% 20% 10% 11%
China 16% 25% 22% 34% 15% 20% 10% 14%
Chinese Taipei 35% 48% 45% 55% 34% 53% 14% 19%
India 10% 13% 16% 21% 12% 18% 8% 6%
Indonesia 15% 18% 40% 36% 20% 21% 9% 13%
Japan 8% 15% 9% 16% 12% 22% 4% 7%
Korea 30% 39% 32% 41% 34% 42% 19% 23%
Malaysia 39% 52% 49% 65% 40% 45% 13% 31%
New Zealand 18% 18% 27% 26% 20% 19% 15% 14%
Philippines 32% 42% 56% 60% 45% 35% 17% 16%
Singapore 56% 59% 69% 71% 68% 78% 24% 30%
Thailand 33% 50% 57% 67% 29% 47% 13% 22%
Total Manufacturing Services
Higher technology manuf. Lower technology manuf.
Notes: Higher technology-intensive manufacturing group is defined as ISIC Rev.3 24, 29-35; lower technology-intensive manufacturing group is defined as ISIC Rev.3 15-23, 25-28, 36-37; services sector is ISIC Rev.3 50-95.Sources: OECD Input-Output Database, March 2010; IDE-JETRO Asian International Input-Output Database, 2005; OECD Bilateral Trade Database, March 2010; OECD Trade in Services, January 2010.
Induced Intermediate Exports by Partner’s Exports (EPE) (Percentage of World Exports in Goods and Services)
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
1995 2000 2005
CHN / JPN has high export elasticities to world trade
Re-exported Intermediate Exports (REI)(Percentage of a Country’s Total Intermediate Exports in Goods and Services)
0%
10%
20%
30%
40%
50%
60%1995 2000 2005
Country size is irrelevant. High values for earlier
stage of production network
MRIO-based indicator•Domestic effects and intercountry spillover
effects (unit increase in final demand)of MRIO Leontief inverse are
D ¤ (I-R)-1 , and
(I-R)-1 - D ¤ (I-R)-1 , respectively where R=intercountry input
coefficient matrix , D is diagonal block, ¤represents cell-by-cell product operation.
A B C DABCD
OECD I-O and BTD based Inter-country I-O table•48 countries (30 OECD countries), 37
sectors•1995-2000-2005•The missing year data is interpolated
using the available tables•Trade coefficients are based on bilateral
trade in goods and services•The missing services trade (of early years)
is filled by trade model estimates
Asia/Oceania Europeamericas row
Asia/Oceania Europeamericas row
Inter-country spillover effects(1995-2005)
Austria
Germany
Asia/Oceania Europeamericas row
1995 2005
Asia/Oceania Europeamericas row
1995 2005
Increased inter-country spillover effects for neighbor European countries and Asian countries
Inter-country spillover effects(1995-2005)
United States Japan China
Increased inter-country spillover effects particularly in Asia
1995 1995 1995
2005 2005 2005
Summary for findings• Benefitted by WIOD data products • European structure is stable, Asia-pacific
experienced great changes• Observed increase in intra-regional trade
and export product specialisation • The position of a country in the global
production supply chain is explained by the combinations of indicators of ICE, EPE, and REI.
• Inter-country spillover effects increased particularly for neighbor countries
“regional” economic integration
Measurement of international interdependence based on gravity model and trade data
Traditional gravity model:
𝑻𝒓𝒔 = 𝑨∙(𝑮𝑫𝑷𝒓)𝜶∙(𝑮𝑫𝑷𝒔)𝜷 ∙(𝒅𝒓𝒔)𝜸
𝑻𝒓𝒔: country r’s import from counry s
𝒅𝒓𝒔: physical distance (time distance) between r and s
𝐥𝐧𝑻𝒓𝒔 = 𝐥𝐧𝑨+ 𝛂𝐥𝐧𝑮𝑫𝑷𝒓 + 𝛃𝐥𝐧𝑮𝑫𝑷𝒓 + 𝜸𝐥𝐧𝒅𝒓𝒔+ 𝝁𝒓𝒔
𝑻𝒓𝒔 = 𝑨∙(𝑮𝑫𝑷𝒓)𝜶∙(𝑮𝑫𝑷𝒔)𝜷 ∙(𝒅𝒓𝒔∙(𝒆𝝁𝒓𝒔)𝟏𝜸)𝜸
Total Resistance (TR):
𝐓𝐑𝐫𝐬 = 𝒅𝒓𝒔∙൫𝒆𝝁𝒓𝒔൯
𝟏𝜸 Non Geographical Resistance (NGR):
𝑵𝑮𝑹= (𝒆𝝁𝒓𝒔)𝟏𝜸
Regression resultsYear (Intercept) log(GDPr[, year]) log(GDPs[, year]) log(disance[, 1])
2000 10.296 0.872 0.971 - 0.8962001 10.357 0.856 0.953 - 0.8782002 9.953 0.871 0.942 - 0.8382003 9.706 0.867 0.947 - 0.8242004 9.448 0.880 0.957 - 0.8192005 9.472 0.880 0.964 - 0.8332006 9.507 0.880 0.964 - 0.842
t value (2006) 39.52 47.77 52.33 - 35.49Pr(>|t|) (2006) <2e- 16 <2e- 16 <2e- 16 <2e- 16
*** *** *** ***signf. Codes ***: 0.001