Vertical Intra‐industry Trade and Fragmentation: An Empirical Examination of the US Auto‐parts Industry

The global auto industry has undergone a significant structural transformation in the last two decades as a result of the international fragmentation of production. This increase in cross‐border production‐sharing activities in the auto industry led to intra‐industry trade (IIT) in auto‐parts. In this study, the extent of IIT in the US auto‐parts industry is examined by decomposing trade into inter‐industry trade, vertical IIT and horizontal IIT. Then the development of vertical IIT is analysed as an indicator of international fragmentation between the US and 29 trading partners. Several country‐specific hypotheses suggested by the fragmentation literature are tested for the period 1989–2006. The results indicate that a substantial portion of IIT in the US auto‐parts industry is vertical IIT, and the econometric results generally support the hypotheses drawn from the theory. In particular, the findings show that the extent of the US vertical IIT is positively correlated with average market size, differences in market size, differences in factor endowments and outward foreign direct investment, while it is negatively correlated with distance and differences in per capita GDP.     

Vertical Intra-Industry Trade and Product Fragmentation in the Auto-Parts Industry

A distinctive feature of present globalization is the development of international production sharing activities, i.e. production fragmentation. The increased importance of fragmentation in world trade has created an interest among trade economists in explaining the determinants of intra-industry trade (IIT) in intermediate goods. In this study, the extent of IIT in Austria’s auto-parts trade is analyzed by decomposing Austria’s auto-parts trade into one-way trade, vertical IIT, and horizontal intra-industry trade IIT. Then, the development of vertical IIT in the auto-parts industry is examined as an indicator for international fragmentation of the production process between Austria and its 29 trading partners, and various country-specific factors suggested by the fragmentation literature are tested using panel econometrics as well as more recent data from 1996 to 2006. The results show that a substantial portion of IIT in the Austrian auto-parts industry is vertical IIT, and the econometric results mainly support the hypothesis drawn from the fragmentation theory. In particular, the findings show that the extent of Austria’s vertical IIT in auto-parts is positively correlated with average market size, differences in per capita GDP, and foreign direct investment, while it is negatively correlated with distance.     

TRADE AND TECHNOLOGY DIFFUSION IN LATIN AMERICA

The main objective of this article is to measure the extent to which technology is diffused via international trade from industrial countries to Latin America. It also assesses the role that international trade within the region plays in this process of technology diffusion. The estimates suggest the existence of trade-related technology diffusion from the North. The results are robust for different specifications of the model. Evidence is also found suggesting that trade among the Latin American countries serves as an additional mechanism by which the technology from the industrial countries is indirectly diffused across the region.     

Trade Openness and Income: A Tale of Two Regions

In this paper, we present evidence of the long‐run effect of trade openness on income per worker for two regions that have followed different liberalisation strategies, namely Asia and Latin America. A model that re‐examines these questions is estimated for two panels of Asian and Latin American countries over the 1980–2008 period using a novel empirical approach that accounts for endogeneity as well as for the time series properties of the variables involved. From an econometric point of view, we apply recent panel co‐integration techniques based on factor models that account for two additional elements usually neglected in previous empirical literature: cross‐dependence and structural breaks. The results point to a positive impact of trade openness in both Asia and Latin America although the size is smaller in the second region. We associate this finding with the degree to which trade was managed in both regions of the developing world.     

Does Latin America Comprise Transnational ‘Subregions’?

We live in a world of nations, but also one of multi‐nation systems. These systems, or transnational regions, affect global economics, politics and diplomacy. Latin America is a widely recognised and documented transnational region. It contains subregional nation systems that might have all of the characteristics and significance of regions and might also affect the broader integration of Latin America. The author defines regionality on the basis of economic integration and measures it with two methods for Latin America, North America, three Latin American subregional systems and one arbitrarily defined nation system within Latin America. He finds a high degree of integration in Latin America, the Andean nations and the Southern Cone of South America. He finds only a modest degree of integration in North America and not significantly greater integration in South America than in Latin America. The division of Latin America into subregions is consistent with the incidence of sub‐regional trade initiatives in the past two decades and might be at least partly responsible for the limited progress to date towards Latin America‐wide integration. Latin American subregions might now be providing a foundation on which to build regionalism in the future.     

Horizontal and Vertical Intra‐industry Trade: An Empirical Test of the ‘Homogeneity Hypothesis’

In this paper, we study if and how country‐specific factors affect intra‐industry trade (IIT) when heterogeneity among sectors is allowed for. The paper is novel in that it is the first that addresses an issue raised by Greenaway et al. (Oxford Bulletin of Economics and Statistics, 1999, 61, 365). Specifically, employing data on a sample of OECD countries over a 10‐year period (1997–1998), we build on and take forward a methodology pioneered by Balassa and Bauwens (Economic Journal, 1987, 97, 923) to study the determinants of horizontal and vertical IIT using a multi‐industry approach. In doing this, we seek to avoid the more extreme measurement problems by allowing for heterogeneity among sectors when country‐specific factors are analysed and among countries when industry‐specific factors are considered. The results are compared to those obtained using the traditional method that does not consider intersectoral heterogeneity. We find that the two models yield statistically different results. Moreover, the tests regarding the choice of model – that is, econometric tests designed to compare one model with another when different sets of explanatory variables are used – confirm the relevance of intersectoral heterogeneity in affecting IIT. To the best of our knowledge, a similar analysis has not yet appeared in the empirical literature on IIT.     

中国分地区进出口贸易与经济增长关系研究

从1981～2004年的统计数据看，我国同亚洲、非洲、欧洲、拉丁美洲、北美洲和大洋洲地区的进出口贸易与我国经济增长之间具有内在关系。我国同各地区的进出口贸易对经济增长的贡献存在明显差异。就长期而言，我国对欧洲地区的出口贸易对经济增长的贡献率最大，进口方面则是从北美洲的进口对我国经济增长的贡献率最大。这一结论为我国贸易政策的分地区调整提供了实证依据。     

Using complex networks analysis to assess the evolution of international economic integration: The cases of East Asia and Latin America

This paper exploits recently-developed indicators based on network analysis to investigate the pattern of international integration followed by East Asian countries and compares it with the Latin American performance. Standard trade openness indicators fall short of portraying the peculiarity of the Asian experience, and of explaining why other emerging markets with similar characteristics have been less successful over the last 25 years. The analysis offers an alternative perspective on the issue regarding international economic integration by taking into account the whole structure of international trade relationships and by determining both the position of countries in the world trade network, and its evolution over time. We find that East Asian countries are more integrated into the world economy, as they have moved from the periphery of the network towards its core. Our results support the idea that the degree of openness matters but it is not enough to characterize economic integration. The number and identity of trade partners, and the specific individual structure of trade for each country, need to be incorporated in order to fully characterize international economic integration. By doing so, it is possible to argue that the integration process of the East Asian countries mirrors their high economic performance, while the lower degree of integration of Latin America can be related to the lack of economic development of the region, even though their degree of openness has increased.     

What Would Normalisation of Economic Relations Between Mashrek Countries,Turkey and Israel Imply?

This article examines the potential for economic cooperation among Mashrek countries, Turkey and Israel in the fields of trade in goods and services both separately and across‐field. It first describes the macroeconomic features of the region and then estimates the overall potential for inter‐industry trade in goods by estimating gravity equations for each country separately and the potential for intra‐industry trade using Grubel‐Lloyd indices. The article also examines the potential for trade in specific services, namely information and computer technology, transport, financial and health services.     

Does and How Does Globalisation Matter at the Industry Level?

In this paper we develop a concept of globalisation at the micro level defined as the exposure of a productivity follower industry in one country to the productivity leader in another country. Globalisation is measured by the intensity of contacts through trade and foreign direct investment. In a simple model and empirically we show that the exposure of a productivity follower to competition with the leader is highly correlated with the productivity gap of this industry. Competition restricted to one region such as Europe, or North America, or the Far East, is not sufficient to achieve highest productivity levels. Moreover, it turns out that foreign direct investment (FDI) has a weight in the globalisation index at least equal to trade. FDI can contribute directly to higher levels of domestic productivity by transferring the best production practices, and put pressure on other domestic producers to improve. The impact of trade on globalisation can be weakened by tariffs and non‐tariffs.     

Who Supports Free Trade in Latin America?

This paper examines individual trade policy preferences across 17 countries in Latin America. The focus is on whether skilled or unskilled workers are more likely to support liberalised trade and on whether country characteristics, such as factor endowments, alter the preferences of skilled and unskilled workers. Based on the standard Heckscher‐Ohlin model and the Stolper‐Samuelson theorem, wage inequality in developing countries will decrease under free trade and unskilled workers will benefit. We find that on average skilled workers are more likely than unskilled workers to support free trade in Latin American countries. Separate country regressions reveal that this pattern is only statistically significant in 8 out of 17 Latin American countries. However, there are no countries in our sample in which unskilled workers are statistically more likely to support free trade than skilled workers, not even in the lowest skill‐endowed country in the sample. We also find that people from Latin American countries with higher GDP, faster growth, more cropland and a longer period of time since reform were more likely on average to support free trade.     

对中国—智利自由贸易区贸易效应的引力模型分析

近年来,区域经济一体化的进程不断加快,这是世界经济发展的必然结果。随着中国与拉丁美洲经贸关系的不断发展,中国已和智利、秘鲁和哥斯达黎加三个拉美国家签订了自由贸易协定,为双方的贸易带来了可观的收益,极大地推动了中国参与区域经济一体化的进程。本文在综述国内外相关文献的基础上,以中国与智利的自由贸易协定为例,采用引力模型,定量研究两国的经济一体化程度以及区域经济一体化所创造的贸易效应。     

Bilateral intra-industry trade flows and intellectual property rights protections: further evidence from the United Kingdom

This paper investigates the relationship between the United Kingdom's (hereafter referred as UK) bilateral intra-industry trade (IIT) and foreign intellectual property rights (IPRs) protections. The empirical investigation is based on pooled UK data and benefits from the theoretical distinction between horizontal and vertical IIT. It also estimates a gravity equation for international trade using both fixed and random effects models. We then extend the analysis by employing the GMM system for dynamic panel models. The principal findings suggest that the UK's IIT is stimulated when the level of a trading partner's IPRs and its imitative ability are considered jointly. However, when IPRs and imitation abilities are considered separately, their disparate effects are not an important factor in determining UK IIT flows.     

Innovation and business research in Latin America: An overview

Innovation in Latin America is a challenge for achieving development. Several Latin American countries and businesses are attempting to increase innov ation and entrepreneurship but they face substantial challenges and difficulties. Institutional, governmental and business policies and practices need to be enhanced in order to increase such innovation. Increasing business research in Latin America and university-business partnerships is probably key in such endeavor. This special issue provides some evidence regarding these challenges at the company level, industry level, and country level. This issue also includes three cases showing Latin American company experiences with financial, marketing and new product innovations and market changes.     

Fostering International Technology Transfer Through Climate Technology Networks Between European and Latin American Universities

Based on experiences gained in the frame of a networking scheme that involves universities from Latin America and Europe, this article addresses international technology transfer (ITT) of climate technology through networks bridging current knowledge and technology gaps between academia, businesses, authorities, and civil society. It is argued that higher education institutions (HEIs) can make a substantial contribution to a sustainable socioeconomic development in Latin America (LA) and at the same time reduce its social vulnerability to climate change impacts. Most research and development in LA is carried out in HEIs, not in industry. Consequently, research agendas are uncoupled from business needs, and university research remains largely uncommercialized. Further, spillover effects, which may benefit businesses in the home country, remain limited. This article raises some opportunities for Latin American HEIs to drive the improvement of local adaptive capacity through ITT and creation of the corresponding capacities, especially in terms of research and development, consultancy, and qualification of human capital in the field of climate technologies. It is argued that climate change poses many challenges to all sectors of society, and the improved international transfer of knowledge and climate technology may result in reducing social and economic vulnerability to future climate impacts in LA. Finally, some recommendations are given that may support current efforts to reduce the overall vulnerability to climate impacts through fostering the social and economic development in Latin America by means of ITT.     

INTRA-INDUSTRY SPECIALIZATION AND THE NORTH AMERICAN FREE TRADE AGREEMENT

This article provides a detailed examination of changes in indicators of intra-industry specialization in manufactured goods in trade between the United States and Mexico over the first five years of the North American Free Trade Agreement. The analysis is conducted at the three-digit SITC level of industry aggregation. Many industries experienced large increases in intraindustry trade (IIT). Only nine industries experience declines in IIT. Changes in various indicators of intra-industry specialization suggest few U.S. industries are candidates for significant adjustment problems. Industries facing potential adjustment pressures account for less than one-fourth of total U.S. imports from Mexico. These findings should lessen opposition to greater regional economic integration in the Western Hemisphere by easing fears that entire industries and jobs will disappear.     

ECFA框架下海峡两岸产业内贸易发展研究

近十年台湾和大陆之间的贸易规模和水平的持续飞速提高为产业内贸易的形成提供了基础,产业内贸易越来越成为其贸易利益的主要来源。文章通过对2000～2009年大陆与台湾产业内贸易总体水平、按技术含量高低分类的产品产业内贸易水平、边际产业内贸易水平以及水平型和垂直型产业内贸易进行量化分析,结果显示海峡两岸产业内贸易总体水平比较高,并且水平型产业内贸易占总产业内贸易的份额有所上升,表明大陆与台湾在国际分工的地位上以及技术水平上的差距正在逐步缩小。文章最后提出了在ECFA框架下发展海峡两岸产业内贸易的对策建议。     

中国影视文化贸易现状及原因分析

影视文化贸易已成为衡量一个国家“软实力”的重要指标．但中国影视文化贸易发展状况不容乐观,存在着文化贸易逆差巨大、影视产品进出口国家及类型过分集中、影视产业地位较低等问题。通过与美国等世界影视贸易大国进行对比,初步探讨了中国影视文化贸易逆差的原因,主要表现在：中国影视文化产业国际竞争力不足;文化产品本身难以满足市场需求;缺乏完善的融资机制;政府支持力度不够。     

Why So Small? Explaining the Size of Firms in Latin America

On average, Latin American firms are small with respect to world patterns, both in terms of the quantity of assets they control and the amount of employment they generate. We examine data on firm size from developed and developing countries around the world to assess the influence of demand, supply and institutional factors on the size of the largest firms in each country. We find that, besides the size of the economy and the level of income per capita, the key determinants of the size of firms are trade openness, stock market capitalisation and physical infrastructure. Our simulations suggest that if the gaps with respect to the best Latin American performer were closed in each of these three areas, firm size in the countries of the region would – on average – reach world patterns.     

Needed B2B marketing capabilities: Insights from the USA and emerging Latin America

Firms from all parts of the world are expanding operations globally in a turbulent economic context, requiring the understanding of nontraditional markets. Much attention has been focused on China and India, but researchers have neglected Latin America, a region economically as important as Germany, India, Japan, and South Korea. Latin America, as is true of many developed and emerging markets, has a strong presence of industrial ? or business to business (B2B) ? transactions. The configuration and convergence-divergence of marketing capabilities are relevant for the understanding of the globalization phenomenon. This study aims to examine B2B marketing capabilities of firms in Chile, Mexico and Peru (as Latin American countries), seeking conceptual issues in order to comprehend their business perspectives and contribute to the almost nonexistent body of research in this region. How do the results from Latin America compare with the USA? While the study shows directional convergence between Chile and Peru, there also is interesting divergence between all Latin American countries and the USA. The findings offer a portfolio of marketing topics that we believe are worthy of practitioner and academic consideration. We propose a model of convergence-divergence of B2B marketing capabilities across nations and state propositions for hypothesis testing.