EMPIRICAL METHODS IN INTERNATIONAL TRADE, M. Plummer, ed., Edward Elgar, 2004
25 Pages Posted: 17 May 2006
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: 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