Formation of production networks in ASEAN: Measuring the real value-added and identifying the role of ASEAN countries in the world supply chains

• Authors: Esquivias Padila Miguel Angel , Sari Dyah Wulan , Handoyo Rossanto Dwi
• Languages of publication: EN

Abstracts

EN

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.

Keywords

EN

Vertical specialization; AFTA; production networks; value-added trade; global input-output

Discipline

• ECONOMICS: ECONOMICS

• Publisher: Prague Development Center, Czech Republic
• Journal: Business and Economic Horizons
• Year: 2017
• Volume: Volume 13
• Issue: Issue 2
• Pages: 237-255

Dates

published

2017-07-20

Contributors

author

Esquivias Padila Miguel Angel

• Faculty of Economics and Business, Airlangga University, Surabaya, Indonesia

author

Sari Dyah Wulan

• Faculty of Economics and Business, Airlangga University, Surabaya, Indonesia

author

Handoyo Rossanto Dwi

• Faculty of Economics and Business, Airlangga University, Surabaya, Indonesia

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