Globalization and economic development

A feature of the continuing integration of the world economy is the globalization of production and the consequent rise of trade in parts and components. Products are more internationalized and less identified with any particular country. Non-trivial shares of the value-added of many exports consist...

Full description

Saved in:
Bibliographic Details
Published inThe journal of international trade & economic development Vol. 8; no. 3; pp. 309 - 318
Main Author Arndt, Sven W.
Format Journal Article
LanguageEnglish
Published Routledge 01.09.1999
Taylor and Francis Journals
SeriesJournal of International Trade & Economic Development
Subjects
division of labour
fragmentation
intermediate products
intra-product specialization
Trade
Online AccessGet full text

Cover

More Information
Summary:A feature of the continuing integration of the world economy is the globalization of production and the consequent rise of trade in parts and components. Products are more internationalized and less identified with any particular country. Non-trivial shares of the value-added of many exports consist of imports and vice versa. Extension of the international division of labour beyond finished products offers developing countries a broader range of choices for industrialization. This paper explores the implications of these developments in the context of a standard trade model. Component specialization in a developing country's import sector is shown to be superior in overall welfare terms to specialization in the integrated product. Output and employment are higher in the sector, but the wage-rental ratio is lower.
ISSN:0963-8199
1469-9559
DOI:10.1080/09638199900000018