International Value Distribution in Asian Electronics and Automobile Industries : An Empirical Value Chain Approach

Abstract

This study aimsto examine the international value distribution structure among major East Asia economies and the US. The mainstream trade theory explains the gains from trade ; however, global value chain (GVC) approach emphasises unevan benefits from globalisation. The present study sees that uneven distribution of gains from regional trade is highly probable in East Asia. This is partly explained by different industrial and FDI policies each economy has pursued for the rapid industrialisation. Based on this view, my investigation is to identify which economy gains the most and which the least from the East Asia production networks. Two key industries, i.e., electronics and automobile, are my principle focus. Input-output method is employed to trace the creation and flows of value-added within the region. The result suggests that regional electronics industries enjoy increasing world export market shares and valueadded at the expense of Japanese electronics and automobile industries who have drastically shrunk during the 1990s. A resurgent role of the US economy in East Asian production networks is also identified.