Formation of production networks in ASEAN: Measuring the real value-added and identifying the role of ASEAN countries in the world supply chains
Journal Title: Business and Economic Horizons - Year 2017, Vol 13, Issue 2
Abstract
This study addresses the two-fold question of whether the integration-liberalization process of ASEAN is headed towards the creation of a single production base region, and how ASEAN links with other trade blocks. It looks into the degree of intra-ASEAN and extra-ASEAN vertical integration vis-à-vis North America, East Asia, and the European Union through the measurement of value-added creation-absorption in global value chains (GVC) and by locating ASEAN within vertical structures. The study employs an international input-output database and breaks up gross exports into different components of value-added using data from 1997, 2004, and 2012. ASEAN has made significant gains in integrating with East Asia. However, ASEAN as a single production region has gained little, and even lost share in value-added trade with NAFTA and Europe. The truth is that ASEAN has a stronger role across the GVC as a supplier of intermediate goods (33%) than as a supplier of final goods (30%). Vertical structures represent more than 43% of ASEAN gross exports, but it still depends on foreign parts and components (35%) to produce its exports. It may be argued that ASEAN 6, which entails a wider scope of integration, might offer larger benefits to the ASEAN project.
Authors and Affiliations
Miguel Angel Esquivias Padilla, Dyah Wulan Sari, Rossanto Dwi Handoyo
Keywords
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- EP ID EP450422
- DOI 10.15208/beh.2017.18
- Views 120
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