Fragmentation: New Production Patterns in the World Economy by Sven W. Arndt

Fragmentation: New Production Patterns in the World Economy

EditorSven W. Arndt, Henryk Kierzkowski

Hardcover | February 15, 2001

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"Fragmentation" is a term used in this volume to describe cross-border component specialization and production-sharing. Examination of recent trade data suggests that offshore sourcing of parts and components, as well as offshore assembly, are assuming an increasing role in the world economy. The theoretical implications of this type of specialization are examined in several chapters with the aid of both Ricardian and Heckscher-Ohlin trade models. Production is first decomposed ("fragmented") into its constituent parts and activities, and then it is at this level that factor-intensitiesand technologies are calibrated. The implications of intra-product specialization and component trade are investigated under conditions of free, restricted, and preferential trade. The role of multinationals is explored and the importance of cross-border service-links among component activities isexamined.Overall, extension of the principle of comparative advantage beyond products to the realm of parts and components is welfare-enhancing. Industries take advantage of offshore sourcing in order to reduce costs and increase competitiveness. Component specialization offers new and additionalopportunities for the exploitation of scale economies. Across a broad range of conditions, it raises output and employment. Its effects on wages are spelled out. Trade between advanced, high-wage and developing low-wage countries is an obvious candidate for the two-way application of componentspecialization. The empirical part of the volume presents an evaluation of new data which allow the separation of trade in components and in final products. It also provides assessments of the role of component specialization in the trade of several countries and regions.In addition to their relevance for trade theorists and country specialists, the studies collected in this volume have interesting implications for the conduct of trade policy. They contradict claims that trade with low-wage countries must be welfare-reducing and they suggest new approaches toindustrialization and economic development.

About The Author

Sven W. Arndt is C.M. Stone Professor of Money, Credit and Trade and Director, The Lowe Institute of Political Economy, Claremont McKenna College; President, The Commons Institute for International Studies. He is also Managing Editor, "North American Journal of Economics and Finance". Henryk Kierzkowski is Professor of Economics at th...
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Details & Specs

Title:Fragmentation: New Production Patterns in the World EconomyFormat:HardcoverDimensions:268 pages, 9.21 × 6.14 × 0.79 inPublished:February 15, 2001Publisher:Oxford University PressLanguage:English

The following ISBNs are associated with this title:

ISBN - 10:019924331X

ISBN - 13:9780199243310

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Table of Contents

1. Sven W. Arndt and Henryk Kierzkowski: Introduction2. Ronald W. Jones and Henryk Kierzkowski: A Framework for Fragmentation3. Alan V. Deardorff: Fragmentation Across Cones4. Richard G. Harris: A Communication Based Model of Global Production Fragmentation5. Swen W. Arndt: Offshore Sourcing and Intra-Product Specialization in Preference Areas6. Victoria Curzon Price: Some Causes and Consequences of Fragmentation7. Alexander J. Yeats: Just How Big is Global Production Sharing?8. Frances Ruane and Holger Gorg: Globalization and Fragmentation: Evidence for the Electronics Industry in Ireland9. Leonard K. Cheng, Larry D. Qiu, and Guofu Tan: Foreign Direct Investment and International Fragmentation in Production10. Alberto Petrucci and Beniamino Quintieri: Will Italy Survive Globalization?11. Giovanni Graziani: International Subcontracting in the Textile and Clothing Industry12. Henryk Kierzkowski: Joining the Global Economy: Experience and Prospects of the Transition Economies

Editorial Reviews

"The papers in this collection explore the theoretical implications and empirical manifestations of cross-borde dispersion of component production."--Book notes