Stability Of International Production Networks: Is East Asia Special?
Source: Keio University
Trade relationships built through production chains appear to be stable due to relation-specific nature of the transactions, compared with the usual transactions of goods sold on the open market. This paper aims to verify such stability of international production networks at the global level, with special emphasis on intra-East Asian trade. A series of survival analyses provide the evidence suggesting that the stability of production networks is a particularly prominent feature of East Asia. In addition, East Asian countries are more likely to engage in long-lived trade relationships of intermediate goods with each other than with outsiders as well as compared to outside the region, unlike in the case of finished products.