Global production sharing and trade in intermediate goods of emerging economies
Date19th Aug 2020
Time02:30 PM
Venue Google-meet
PAST EVENT
Details
Global trade in manufactured goods is increasingly characterised by trade in intermediate goods, nearly 80 per cent, which drives the process of global production sharing. Since the late 1980s, emerging economies (EMEs) established themselves as the key participants of global production sharing by possessing one-third of the intermediate goods trade. According to the Comtrade (2017) data, the values of intermediate goods trade in EMEs increased from $0.07 trillion in 1988 to $5.92 trillion in 2017, growing at an annual average growth rate of 13 per cent. The most important factor driving this growth is the proliferation of production sharing in EMEs. Contrary to the world trends, EMEs have higher shares of final assembly activities which open a broader future for global production sharing in EMEs. We analyse the impact of vertical trade continuity on global production sharing at the aggregate and disaggregate levels. We find that vertical trade continuity has a positive and significant impact on global production sharing in EMEs. The impact is necessarily higher for intermediate goods compared to manufacturing goods. The disaggregated analysis shows that vertical trade continuity is process specific and may vary between the stages of production sharing. Our findings emphasise the need for emerging economies to facilitate trade policies that maintain trade relations and integrate themselves into the global production sharing network. The findings also highlight the need for process-specific trade policies within production sharing.
Speakers
Sanjeev Vasudevan (HS15D032)
Dept. of Humanities and Social Sciences