Determinants of Trade in Parts and Components: An Empirical Analysis

BBVA Working Paper, No.15/24 October 2016Journal of Chinese Economic and Foreign Trade Studies 9(3):245-252

15 Pages Posted: 30 Apr 2018 Last revised: 3 Aug 2021

See all articles by Alicia García-Herrero

Alicia García-Herrero

Bruegel; Hong Kong University of Science & Technology (HKUST) - HKUST Institute for Emerging Market Studies (IEMS); Natixis

K. C. Fung

University of California at Santa Cruz

Date Written: July 6, 2015

Abstract

The rapid rise of trade in part of components –in the context of an increasingly important global production chain – is a key future of Asia’s economic miracle. This paper aims at analyzing empirically what are key determinants of trade in parts and components. The focus is Latin America and Asia so as to draw relevant lesson for the former to the latter. The success keys of Greater China and Mexico, within the Latin American region could, thus, be explained, at least partially by identifying such key determinants. Our results show that the size of the economy (GDP), human capital, labor costs and the institutional/infrastructural framework have played in enabling regions to develop their comparative advantages of trade in parts and components.

Keywords: International Trade; Production Networks; Trade in Parts and Components; Institutional Framework; Infrastructural Framework

JEL Classification: F10; F12; F15; F16

Suggested Citation

Garcia-Herrero, Alicia and Fung, K.C., Determinants of Trade in Parts and Components: An Empirical Analysis (July 6, 2015). BBVA Working Paper, No.15/24 October 2016Journal of Chinese Economic and Foreign Trade Studies 9(3):245-252, Available at SSRN: https://ssrn.com/abstract=3160557 or http://dx.doi.org/10.2139/ssrn.3160557

Alicia Garcia-Herrero (Contact Author)

Bruegel ( email )

Rue de la Charité 33
B-1210 Brussels Belgium, 1210
Belgium

Hong Kong University of Science & Technology (HKUST) - HKUST Institute for Emerging Market Studies (IEMS) ( email )

IAS 2019, Lo Ka Chung Building,
Lee Shau Kee Campus, HKUST
Clear Water Bay, Kowloon
Hong Kong

Natixis ( email )

France

K.C. Fung

University of California at Santa Cruz ( email )

Santa Cruz, CA 95064
United States
831-459-3273 (Phone)
831-459-5900 (Fax)

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