Proximity and Production Fragmentation
Authors: Johnson, Robert C.; Noguera, Guillermo
Source: The American Economic Review, Volume 102, Number 3, May 2012 , pp. 407-411(5)
Publisher: American Economic Association
Abstract:Cross-border production chains tend to include geographically proximate countries. This suggests that increases in fragmentation should be largest among nearby trading partners, and thus may serve to localize gross trade. Using data on gross and value added trade from 1970-2009, we present three results supporting this conjecture. First, value added to export ratios are lower and falling more rapidly within geographic regions than between them. Second, gross trade travels shorter distances from source to destination than value added trade, and this gap is growing over time. Third, bilateral value added to export ratios have fallen most among nearby trading partners.
Document Type: Research Article
Publication date: 2012-05-01
- The American Economic Review is a general-interest economics journal. The journal is published quarterly and contains articles on a broad range of topics. Established in 1911, the AER is among the nation's oldest and most respected scholarly journals in the economics profession.
- Editorial Board
- Information for Authors
- Subscribe to this Title
- Membership Information
- Terms & Conditions
- e-Publications for AEA Members
- ingentaconnect is not responsible for the content or availability of external websites