Browse > Article
http://dx.doi.org/10.11644/KIEP.EAER.2020.24.4.385

The Reorganization of Global Value Chains in East Asia before and after COVID-19  

Miroudot, Sebastien (OECD)
Publication Information
East Asian Economic Review / v.24, no.4, 2020 , pp. 389-416 More about this Journal
Abstract
This paper provides empirical evidence on the reorganization of GVCs in East Asia, highlighting that structural trends explain a decrease in the fragmentation of production after 2011 but that it is not the result of rising trade costs along the value chain. Using harmonized inter-country input-output tables, the paper first analyzes the global import intensity of production to document changes in the structure of GVCs. It then calculates theory-consistent bilateral trade costs for intermediate and final products using an approach derived from the gravity literature and introduces a new index of cumulative trade costs along the value chain. These data are used to discuss whether the decrease in global imports is the consequence of shifts in demand, efficiency-enhancing strategies of firms or rising trade costs. Between 2011 and 2016, cumulative trade costs have decreased in East Asian GVCs. However, as COVID-19 is likely to intensify trade and investment uncertainties, trade costs could increase in the future. Policies aimed at reducing uncertainties and preserving the gains from trade and investment liberalization will be key in this new environment.
Keywords
Global Value Chain; Import Intensity; Fragmentation of Production; Trade Costs; Input-Output;
Citations & Related Records
Times Cited By KSCI : 4  (Citation Analysis)
연도 인용수 순위
1 de Vries, G., Chen, Q., Hasan, R. and Z. Li. 2019. "Do Asian Countries Upgrade in Global Value Chains? A Novel Approach and Empirical Evidence," Asian Economic Journal, vol. 33, no. 1, pp. 13-37.   DOI
2 Dietzenbacher, E., and B. Los. 2012. "Quantification of the Contributions of Productivity Growth and Globalization to World Consumption Growth Rates (1995-2008)." Paper presented at the 32nd General Conference of the International Association for Research in Income and Wealth. Boston. August.5-11, 2012. (accessed March 21, 2020)
3 Duan, Y., Dietzenbacher, E., Jiang, X., Chen, X. and C. Yang. 2018. "Why Has China's Vertical Specialization Declined?" Economic Systems Research, vol. 30, no. 2, pp. 178-200.   DOI
4 Eaton, J. and S. Kortum. 2002. "Technology, Geography, and Trade," Econometrica, vol. 70, no. 5, pp. 1741-1779.   DOI
5 Evenett, S. J. 2019. "Protectionism, State Discrimination, and International Business since the Onset of the Global Financial Crisis," Journal of International Business Policy, vol. 2, no. 1, pp. 9-36.   DOI
6 Head, K. and J. Ries. 2001. "Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of U.S.-Canada Trade," American Economic Review, vol. 91, no. 4, pp. 858-876.   DOI
7 Head, K. and T. Mayer. 2014. "Gravity Equations: Workhorse, Toolkit, and Cookbook." In Gopinath, G., Helpman, E. and K. Rogoff. (eds.) Handbook of International Economics. vol. 4. Amsterdam: Elsevier. pp. 131-195.
8 Javorcik, B. 2020. "Global Supply Chains Will Not Be the Same in the Post-COVID-19 World." In Baldwin, R. and S. J. Evenett. (eds.) COVID-19 and Trade Policy: Why Turning Inward Won't Work. London: CEPR Press. pp. 111-116.
9 Leontief, W. W. 1936. "Quantitative Input and Output Relations in the Economic System of the United States," Review of Economics and Statistics, vol. 18, no. 3, pp. 105-125.   DOI
10 Johnson, R. C. 2018. "Measuring Global Value Chains," Annual Review of Economics, vol. 10, pp. 207-236.   DOI
11 Matous, P. and Y. Todo. 2017. "Analyzing the Coevolution of Interorganizational Networks and Organizational Performance: Automakers' Production Networks in Japan," Applied Network Science, vol. 2, article no. 5, pp. 1-24. (accessed March 21, 2020)   DOI
12 Miroudot, S. 2019. Services and Manufacturing in Global Value Chains: Is the Distinction Obsolete? ADBI Working Paper Series, no. 927.
13 Miroudot, S. 2020. "Reshaping the Policy Debate on the Implications of COVID-19 for Global Supply Chains," Journal of International Business Policy, vol. 3, no. 4, pp. 430-442.   DOI
14 Wen, D. 2018. "Domestic Value Added in China's Exports to the World and its Partners," Chinese Economy, vol. 51, no. 1, pp. 45-68.   DOI
15 Shih, W. 2020. "Is It Time to Rethink Globalized Supply Chains?" MIT Sloan Management Review, vol. 61, no. 4, pp. 16-18.
16 Taglioni, D. and D. Winkler. 2016. Making Global Value Chains Work for Development. Washington, DC: The World Bank.
17 Timmer, M. P., Erumban, A. A., Los, B., Stehrer, R. and G. J. de Vries. 2014. "Slicing Up Global Value Chains," Journal of Economic Perspectives, vol. 28, no. 2, pp. 99-118.   DOI
18 Timmer, M. P., Los, B., Stehrer, R. and G. J. de Vries. 2016. An Anatomy of the Global Trade Slowdown based on the WIOD 2016 Release. GGDC Research Memorandum, GD-162.
19 Timmer, M. P., Miroudot, S. and G. J. de Vries. 2019. "Functional Specialization in Trade," Journal of Economic Geography, vol. 19, no. 1, pp. 1-30.   DOI
20 World Bank. 2019. World Development Report 2020. Global Value Chains: Trading for Development. Washington, DC: The World Bank.
21 Xing, Y. 2016. "Global Value Chains and China's Exports to High-Income Countries," International Economic Journal, vol. 30, no. 2, pp. 191-203.   DOI
22 Yeo, A. 2020. "China's Rising Assertiveness and the Decline in the East Asian Regionalism Narrative," International Relations of the Asia-Pacific, vol. 20, no. 3, pp. 445-475.   DOI
23 Zhu, L., Ito, K. and E. Tomiura. 2016. Global Sourcing in the Wake of Disaster: Evidence from the Great East Japan Earthquake. RIETI Discussion Paper Series, no. 16-E-089.
24 Anderson, J. E. and Y. V. Yotov. 2010. "The Changing Incidence of Geography," American Economic Review, vol. 100, no. 5, pp. 2157-2186.   DOI
25 Agnosteva, D. E., Anderson, J. E. and Y. V. Yotov. 2014. Intra-National Trade Costs: Measurement and Aggregation. NBER working paper, no. 19872.
26 Anderson, J. E. and E. van Wincoop. 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, vol. 93, no. 1, pp. 170-192.   DOI
27 Anderson, J. E., Larch, M. and Y. V. Yotov. 2018. "GEPPML: General Equilibrium Analysis with PPML," World Economy, vol. 41, no. 10, pp. 2750-2782.   DOI
28 Baldwin, R. 2006. "Globalisation: The Great Unbundling(s)." In Globalisation challenges for Europe. Part I. Helsinki: Secretariat of the Economic Council. pp. 11-54.
29 Baldwin, R. 2016. The Great Convergence: Information Technology and the New Globalization. Cambridge, MA: Harvard University Press.
30 Baldwin, R. and R. Forslid. 2014. "The Development and Future of Factory Asia." In Ferrarini, B. and D. Hummels. (eds.) Asia and Global Production Networks. Implications for Trade, Incomes and Economic Vulnerability. Cheltenham: ADB and Edward Elgar. pp. 338-368.
31 Baldwin, R. and T. Okubo. 2019. "GVC Journeys: Industrialisation and Deindustrialisation in the Age of the Second Unbundling," Journal of the Japanese and International Economies, vol. 52, pp. 53-67.   DOI
32 Miroudot, S., Sauvage, J. and B. Shepherd. 2013. "Measuring the Cost of International Trade in Services," World Trade Review, vol. 12, no. 4, pp. 719-735.   DOI
33 Miroudot, S. and H. Nordstrom. 2020. "Made in the World? Global Value Chains in the Midst of Rising Protectionism," Review of Industrial Organization, vol. 57, no. 2, pp. 195-222.   DOI
34 Miroudot, S. and M. Ye. 2020. "Decomposing Value Added in Gross Exports," Economic Systems Research. (accessed May 30, 2020)   DOI
35 Miroudot, S., Rouzet, D. and F. Spinelli. 2013. Trade Policy Implications of Global Value Chains: Case Studies. OECD Trade Policy Paper, no. 161.
36 Novy, D. 2013. "Gravity Redux: Measuring International Trade Costs with Panel Data," Economic Inquiry, vol. 51, no. 1, pp. 101-121.   DOI
37 Obashi, A. and F. Kimura. 2018. "Are Production Networks Passe in East Asia? Not Yet," Asian Economic Papers, vol. 17, no. 3, pp. 86-107.   DOI
38 Obashi, A. and F. Kimura. 2020. New Developments in International Production Networks: Impact of Digital Technologies. ERIA Discussion Paper Series, no. 332.
39 Organisation for Economic Co-operation and Development (OECD). 2013. Interconnected Economies. Benefiting from Global Value Chains. Paris: OECD Publishing.
40 Organisation for Economic Co-operation and Development (OECD). 2019. Measuring Distortions in International Markets: The Semiconductor Value Chain. OECD Trade Policy Papers, no. 234.
41 Organisation for Economic Co-operation and Development (OECD) 2020. Shocks, Risks and Global Value Chains: Insights from the OECD METRO model. Paris: OECD Publishing.
42 Choi, S.-H. and J.-I. Choi. 2016. "GVC Case Analysis of the Motor Vehicles Industry: Focusing on Hyundai Motor," Journal of Digital Convergence, vol. 14, no. 12, pp. 73-84. (in Korean)   DOI
43 Pomfret, R. 2010. Regionalism in East Asia: Why Has It Flourished Since 2000 and How Far Will It Go? Hackensack: World Scientific Publishing.
44 Bonadio, B., Huo, Z., Levchenko, A. A. and N. Pandalai-Nayar. 2020. Global Supply Chains in the Pandemic. NBER Working Paper, no. 27224.
45 Brun, L. and S. Frederick. 2017. "Chapter 4. Korea and the Shipbuilding Global Value Chain." In Korea in Global Value Chains: Pathways for Industrial Transformation. Duke Global Value Chains Center and Korea Institute for Industrial Economics & Trade.
46 Caliendo, L. and F. Parro. 2015. "Estimates of the Trade and Welfare Effects of NAFTA," Review of Economic Studies, vol. 82, no. 1, pp. 1-44.   DOI
47 Choi, B.-I. 2020. "Global Value Chains in East Asia under 'New Normal': Ideology-Technology-Institution Nexus," East Asian Economic Review, vol. 24, no. 1, pp. 3-30.   DOI