1WG 1 2012 6 29 2 12/06/29 1 2 Baldwin (2011) 19801 2 2 12/06/29 2
The 2 nd Unbundling The 2 nd unbundling, i.e., international division of labor in terms of production processes and tasks, has developed since the 1980s. The 2 nd unbundling in the manufacturing sector is most advanced in East Asia. 1 st 2 nd Bay A Bay B ICT Bay A Bay B Bay C Bay C 12/06/29 Source: Baldwin. 3 Transformation of international commerce 12/06/29 Source: Baldwin. 4
SL PB SL PB SL PB PB SL SL PB PB: SL: 12/06/29 5 Two-dimensional fragmentation: An illustration Disintegration Competitive spot bidding Internet auction Domestic arm's length fragmentation EMS Cross-border arm s length fragmentation (Boundary of firm) Subcontracting OEM contracts Outsourcing Domestic intra-firm fragmentation Cross-border intra-firm fragmentation Origin (National border) Distance Source: Kimura and Ando (2005). 6
12/06/29 7 2007 Source: Kimura and Obashi (2010). 12/06/29 8
2 12/06/29 9 skill shift cf. e.g., R&D Extensive margin HS9 cf. cf. 12/06/29 10
FigureTypical sequence in international production networking Decision of international production networking Establishment of a foreign affiliate Reach full operation Foreign Preparation period for FDI typically 2 3 years) Expanding operation (typically 2 3 years) time Domestic Domestic adjustments on inputs (K, H, L) domestic establishments domestic affiliates exp./imp. patterns 12/06/29 11 12/06/29 12
12/06/29 13 12/06/29 14
12/06/29 15 12/06/29 16
12/06/29 17 US 12/06/29 Ando and Kimura (2011b). 18
extensive margin Ando and Kimura (2011b). 12/06/29 19 <Fall> 3. Decomposition Analysis: GFC (cont d) Recovery: symmetric to fall <Recovery> 12/06/29 Ando and Kimura (2011b). 20
12/06/29 Ando and Kimura (2011b). 21 12/06/29 Ando and Kimura (2011b). 22
SNA Baldwin and Kimura (1998) FATS 12/06/29 23 2 12/06/29 24
Ando, Mitsuyo and Kimura, Fukunari. (2011a) Globalizing Corporate Activities in East Asia and Impact on Domestic Operations: Further Evidence from Japanese Manufacturing Firms. RIETI Discussion Paper Series 11 E 034 (March), 2011 (http://www.rieti.go.jp/jp/publications/act_dp2010.html). Ando, Mitsuyo and Kimura, Fukunari. (2011b) How Did the Japanese Exports Respond to Two Crises in the International Production Networks?: The Global Financial Crisis and the East Japan Earthquake. ERIA Discussion paper Series No.2012 01 (http://www.eria.org).forthcoming in Asian Economic Journal. Ando, Mitsuyo and Kimura, Fukunari. (2012) International Production Networks and Domestic Operations by Japanese Manufacturing Firms: Normal Periods and the Global Financial Crisis. Forthcoming in RIETI Discussion Paper Series. Baldwin, Richard. (2011) 21 st Century Regionalism: Filling the Gap between 21 st Century Trade and 20 th Century Trade Rules. Centre for Economic Policy Research Policy Insight No. 56 (May) (http://www.cepr.org). Baldwin, Robert E. and Kimura, Fukunari. (1998) Measuring U.S. International Goods and Services Transactions. In R. E. Baldwin, R. E. Lipsey, and J. D. Richardson, eds., Geography and Ownership as Bases for Economic Accounting, Chicago: The University of Chicago Press:9 36.The former version was distributed as NBER Working Paper No. 5516, National Bureau of Economic Research, Inc., March 1996.Reprinted in Bernard Hoekman, ed., The WTO and Trade in Services Volume I, Cheltenham: Edward Elgar, 2012: 187 214. Kimura, Fukunari and Ando, Mitsuyo. (2005) Two-dimensional Fragmentation in East Asia: Conceptual Framework and Empirics, International Review of Economics and Finance 14, pp.317-348. Kimura, Fukunari and Obashi, Ayako. (2010) International Production Networks in Machinery Industries: Structure and Its Evolution. ERIA Discussion Paper ERIA DP 2010 09 (September) (http://www.eria.org/publications/discussion.html). 12/06/29 25