Stability of production networks in East Asia: Duration and survival of trade

Obashi, Ayako

doi:10.1016/j.japwor.2009.06.002

Cited by 76 publications

(59 citation statements)

References 14 publications

(14 reference statements)

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“…lasted longer, and so did exportsof machinery, a finding confirmed by the analysis of Asian trade flows by Obashi (2010). explore the determinants of export survival further by testing the implications of a search model proposed by Rauch and Watson (2003) in which importers search for low-cost suppliers and exporters invest optimally in production capacity in the face of moral hazard (risk of non-payment).…”

Section: Introductionmentioning

confidence: 86%

Success and Failure of African Exporters

Cadot¹,

Iacovone²,

Pierola³

et al. 2011

Policy Research Working Papers

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Using a novel dataset with transaction-level level exports from Malawi, Mali, Senegal and Tanzania, we explore the determinants of the survival of firm-product-destination combinations past the first year after entry on export markets. We find that survival correlates with diversification (or experience) at the extensive margin: a firm-productdestination combination is more likely to survive if the firm ships more * This paper is part of a World Bank research project initiated by Paul Brenton and Denisse Pierola. Financial support from the BNPP Trust Fund on Improving the Survival of African Exports is gratefully acknowledged. We are also grateful to the Malawi Revenue Authority, the Direction Générale des Douanes du Mali, the Direction Générale des Douanes du Sénégal, and the Tanzania Revenue Authority for their cooperation and willingness to share data. We also thank Frances Aidoo, William Baah-Boateng, Sidiki Guindo, Anthony Mveyange and Nelson Nsiku for their assistance in the collection of the customs data used in this paper. products to that destination, or if it ships that product to more destinations, suggesting synergies within the firm. Most strikingly, we find significant evidence of cross-firm synergies: a firm-product-destination is more likely to survive, the more firms from the same country export the same product to the same destination. These results may suggest a case for export promotion at the national level.

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Section: Introductionmentioning

confidence: 86%

Success and Failure of African Exporters

Cadot¹,

Iacovone²,

Pierola³

et al. 2011

Policy Research Working Papers

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“…Hence transactions within these networks tend to be stable. Obashi (2010aObashi ( , 2010b found that trade in parts and components between East Asian countries tends to be more resilient than trade in finished goods or trade with extra-regional partners. Thus, while the Asian Crisis reduced the locational advantages of channeling FDI to ASEAN, it did not cause the MNEs to break off existing relationships with Southeast Asian firms.…”

Section: Fdi In East Asia From 1985-2011mentioning

confidence: 99%

Understanding Foreign Direct Investment in East Asia

Thorbecke

Salike²

2011

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Asian Development Bank InstituteThe Working Paper series is a continuation of the formerly named Discussion Paper series; the numbering of the papers continued without interruption or change. ADBI's working papers reflect initial ideas on a topic and are posted online for discussion. ADBI encourages readers to post their comments on the main page for each working paper (given in the citation below). Some working papers may develop into other forms of publication. Email: wthorbecke@adbi.orgWillem Thorbecke is a senior research fellow at ADBI in Tokyo. Nimesh Salike is a Lecturer, Xi'an Jiaotong-Liverpool University, Department of Business, Economics and Management, Suzhou, China. Willem Thorbecke acknowledges an intellectual debt to Dr. Masaru Yoshitomi.The views expressed in this paper are the views of the authors and do not necessarily reflect the views or policies of ADBI, the Asian Development Bank (ADB), its Board of Directors, or the governments they represent, or the views of the IDB or its member countries, ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.Asian Development Bank Institute Kasumigaseki Building 8F 3-2-5 Kasumigaseki, Chiyoda-ku Tokyo 100-6008, Japan AbstractWe recount East Asia's experience with foreign direct investment (FDI). We document that, contrary to the Rybczynski theorem, capital flows in the region cause the host country's labor-intensive industry to expand and its capital-intensive industry to decline. We also present narrative evidence that sheds light on how FDI is affected by the host's country's locational advantages, whether Asian FDI is footloose, and how the PRC has become the center of Factory Asia. Finally, we show that the evolution of production networks in the region can be explained partly by changes in the service cost of linking geographically separated production blocks relative to the cost saving arising from slicing up the value chain.

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“…Basically, this study employed a gravity model in order to evaluate the relationship between two trading partners that are located far away, in this case Malaysia and each MEAC country. As the previous studies found, distance has a negative impact on exports (Obashi 2010). The longer the distance between trade partners, the higher the costs (transportation costs) that will result and indirectly lower the profit margin.…”

Section: Gravity Modelmentioning

confidence: 66%

“…Empirically, the gravity model, which was employed by many previous studies, was found to be powerful (Obashi 2010). Gravity models have strong power in explaining the trade pattern and testing hypotheses as the aim of the empirical part of using gravity models is to test the hypothesis concerning the bilateral trade flows of Malaysia and candidate countries (Middle Eastern Asian countries).…”

Section: Gravity Modelmentioning

confidence: 99%