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Global Production Networks and Regional Integration

EMPIRICAL METHODS IN INTERNATIONAL TRADE, M. Plummer, ed., Edward Elgar, 2004

25 Pages Posted: 17 May 2006  

Sven W. Arndt

Claremont McKenna College - Robert Day School of Economics and Finance

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

Arndt, Sven W., Global Production Networks and Regional Integration. EMPIRICAL METHODS IN INTERNATIONAL TRADE, M. Plummer, ed., Edward Elgar, 2004. Available at SSRN: https://ssrn.com/abstract=901858

Sven W. Arndt (Contact Author)

Claremont McKenna College - Robert Day School of Economics and Finance ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States

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