Regional Integration and Vertical specialization - a study of the telecommunications equipment industry in Southeast Asia
(2011) NEKM01 20102Department of Economics
- Abstract
- This paper examines the trade and specialization effects of China’s regional integration with
South East Asia. Production fragmentation enables a firm or country to specialize in upstream,
midstream or downstream activities rather than the whole production chain. A decrease in tariffs
and other service link costs justify outsourcing or re-locating production to the country with best
location advantages. Therefore a free trade area, such as the ASEAN-China Free Trade
Agreement should result in increased fragmented trade among the partner countries, and favor
vertical specialization.
The focus of the study is the telecommunications industry in ASEAN-5 and China. Calculations
of revealed comparative advantage show that... (More) - This paper examines the trade and specialization effects of China’s regional integration with
South East Asia. Production fragmentation enables a firm or country to specialize in upstream,
midstream or downstream activities rather than the whole production chain. A decrease in tariffs
and other service link costs justify outsourcing or re-locating production to the country with best
location advantages. Therefore a free trade area, such as the ASEAN-China Free Trade
Agreement should result in increased fragmented trade among the partner countries, and favor
vertical specialization.
The focus of the study is the telecommunications industry in ASEAN-5 and China. Calculations
of revealed comparative advantage show that China has the strongest comparative advantages in
both the production of components and in assembly operations. This illustrates the increased
importance of vertical linkages between upstream, midstream and downstream firms.
Agglomeration complicates the analysis of how investment flows and component trade is
affected by the creation of ACFTA. Combined with a substantial decrease of trade barriers in the
industry before integration this suggests that the effects of ACFTA on vertical specialization will
be limited. (Less)
Please use this url to cite or link to this publication:
http://lup.lub.lu.se/student-papers/record/1785440
- author
- Dixon, Amelia LU
- supervisor
-
- Yves Bourdet LU
- organization
- course
- NEKM01 20102
- year
- 2011
- type
- H1 - Master's Degree (One Year)
- subject
- keywords
- production fragmentation, vertical specialization, telecommunications industry, regional integration, ACFTA.
- language
- English
- id
- 1785440
- date added to LUP
- 2011-02-10 15:18:27
- date last changed
- 2011-02-10 15:18:27
@misc{1785440, abstract = {{This paper examines the trade and specialization effects of China’s regional integration with South East Asia. Production fragmentation enables a firm or country to specialize in upstream, midstream or downstream activities rather than the whole production chain. A decrease in tariffs and other service link costs justify outsourcing or re-locating production to the country with best location advantages. Therefore a free trade area, such as the ASEAN-China Free Trade Agreement should result in increased fragmented trade among the partner countries, and favor vertical specialization. The focus of the study is the telecommunications industry in ASEAN-5 and China. Calculations of revealed comparative advantage show that China has the strongest comparative advantages in both the production of components and in assembly operations. This illustrates the increased importance of vertical linkages between upstream, midstream and downstream firms. Agglomeration complicates the analysis of how investment flows and component trade is affected by the creation of ACFTA. Combined with a substantial decrease of trade barriers in the industry before integration this suggests that the effects of ACFTA on vertical specialization will be limited.}}, author = {{Dixon, Amelia}}, language = {{eng}}, note = {{Student Paper}}, title = {{Regional Integration and Vertical specialization - a study of the telecommunications equipment industry in Southeast Asia}}, year = {{2011}}, }