Global Production Networks and Regional Integration
Sven W. Arndt
Claremont Colleges - Robert Day School of Economics and Finance
EMPIRICAL METHODS IN INTERNATIONAL TRADE, M. Plummer, ed., Edward Elgar, 2004
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.
Number of Pages in PDF File: 25
Keywords: fragmentation, regional integration, production networks, exchange-rate elasticities, offshore sourcing
JEL Classification: F11, F15, F21, F31Accepted Paper Series
Date posted: May 17, 2006
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