Asia and Global Production Networks

Asia and Global Production Networks

Implications for Trade, Incomes and Economic Vulnerability

Edited by Benno Ferrarini and David Hummels

This timely book deploys new tools and measures to understand how global production networks change the nature of global economic interdependence, and how that in turn changes our understanding of which policies are appropriate in this new environment. Bringing to bear an array of the latest methods and data to study global value chains, this unique book assesses the evolution of global value chains at the firm level, and how this affects competitiveness in Asia.

Chapter 1: Asia and global production networks: implications for trade, incomes and economic vulnerability

Benno Ferrarini and David Hummels

Subjects: asian studies, asian development, asian economics, development studies, asian development, development economics, economics and finance, asian economics, international economics


Global value chains (GVCs) involve the production of goods and services through interlinked stages of production scattered across international borders. The international exchange of intermediate inputs, as opposed to final consumer goods, is a phenomenon as old as trade itself. What is new in the global economy is rapid growth in the extent and the complexity of global value chains. Nowhere in the world is production fragmented quite as much, or GVCs quite as complex or as fast growing, as in Asia. As a consequence, there has been a widespread recognition by policy makers, practitioners and scholars in the field of international economics that global value chains should figure more prominently in their policies, advice and research. Early academic work focused primarily on measurement of the extent, geographic orientation, and growth in GVCs (Arndt and Kierzkowski 2001; Hummels, Ishii and Yi 2001; Grossman and Rossi-Hansberg 2008; Kimura 2006; Johnson and Noguera 2012). Among international bodies, the World Trade Organization (WTO) Secretariat launched its “Made in the World” initiative in 2010, and has collaborated since with the Organisation for Co-operation and Economic Development (OECD) to establish a statistical platform (OECD-WTO TiVA) to quantify GVCs and to increase measurement capacity.

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