Determinants of trade in parts and components: Latin America and East Asia
| Published date | 03 October 2016 |
| Pages | 245-252 |
| DOI | https://doi.org/10.1108/JCEFTS-10-2016-035 |
| Date | 03 October 2016 |
| Author | K.C. Fung,Lurong Chen,Alicia Garcia-Herrero |
| Subject Matter | Economics,International economics |
Determinants of trade in parts
and components: Latin America
and East Asia
K.C. Fung
Department of Economics, University of California, Santa Cruz,
California, USA
Lurong Chen
Economic Research Institute for ASEAN and East Asia,
Jakarta, Indonesia, and
Alicia Garcia-Herrero
Bruegel, Brussels, Belgium
Abstract
Purpose – The purpose of this paper is to investigate what affects trade in parts and components,
particularly for Latin America and East Asia.
Design/methodology/approach – The methodology includes using data analysis as well as
regressions
Findings – The main ndings show that logistics and infrastructure are among the most important
determinants of supply chain trade. For Latin America to participate more in such trade, the region
should attract more foreign direct investment, including direct investment from China in
transportation, roads and ports as well as infrastructure in general.
Originality/value – This paper is among the rst in the literature to conduct regression analysis on
trade in parts and components.
Keywords China
Paper type Research paper
1. Introduction
In this paper, we would like to examine some characteristics, trends and the main
determinants of international trade in parts and components. Production networks or
supply chains can be measured in various ways. One relatively direct and
internationally consistent way is to isolate trade in parts and components using
international trade statistics. This allows us to compare and focus on some
characteristics of production fragmentation over many years and involving many
countries.
Until the past few years, world trade has been growing more than twice as fast as
gross domestic product (GDP). Exports from developing countries also outpaced those
from high-income countries. Much of this expansion and diversication in trade has
been linked to the global fragmentation of production, especially in Asia and Latin
America. Global production sharing in manufacture has reached more than US$2tn
every year since 2000, or more than 30 per cent of the world trade in manufactured
products. Trade in parts and components or intermediate goods was growing faster
The current issue and full text archive of this journal is available on Emerald Insight at:
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Trade in
parts and
components
245
Journalof Chinese Economic and
ForeignTrade Studies
Vol.9 No. 3, 2016
pp.245-252
©Emerald Group Publishing Limited
1754-4408
DOI 10.1108/JCEFTS-10-2016-035
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