Global Production Networks and Regional Integration
EMPIRICAL METHODS IN INTERNATIONAL TRADE, M. Plummer, ed., Edward Elgar, 2004
25 Pages Posted: 17 May 2006
Abstract
This paper examines the implications of cross-border production fragmentation in the context of regional integration, using both general- and partial-equilibrium approaches. It shows the conditions under which fragmentation converts a trade-diverting FTA into a trade creating one. It assesses the effect of fragmentation on the balance of payments and the sensitivity of trade flows to exchange-rate changes.
Keywords: fragmentation, regional integration, production networks, exchange-rate elasticities, offshore sourcing
JEL Classification: F11, F15, F21, F31
Suggested Citation: Suggested Citation
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