Study On The Division Of Product In East Asia

Since the end of World War II, economic globalization has become possible with the progress of science and technology, the rise of free trade doctrine and the facilitation of investment environment. The primary characteristic of economic globalization is the globalization of consumption which means some country or region can consume products that are produced in the other country or region through international trade. And at the same time, the gradual rise of multinational corporations also makes it possible for the globalization of production. With the globalization of production there comes a new form of international division of labor——intra-product specialization. It indicates the phenomenon that dividing the production process of some final product into different sequences and making each country specialize in particular stages of the production sequence on the base of its comparative advantage. Since the1980s intra-product specialization has developed rapidly, and it has gradually become the main form of international division of labor. At the same time, the industrial division in East Asia has also changed dramatically. From the1960s to the1990s, the form of international division of labor evolutes with the path of inter-industry——intra-industry——intra-product in East Asia. Up to now, the multinational division of labor in East Asia has been deep into parts and components or processed goods which are intermediate products level, and there has formed a unique intra-product specialization system.The rapid development of international intra-product specialization especially in East Asia attracted many scholars to study it. After summarizing and collation of existing literature, there are two important issues found:The first one is about the motivation of intra-product specialization. There lacks of a unified analytical framework of existing theories as to the phenomenon that the form of international division of labor evolutes with the path of inter-industry——intra-industry——intra-product. The second one is about the stability of intra-product specialization system. The current studies about this issue especially in East Asia is poor. Therefore, this paper attempts to answer the following questions:What is the motivation of the rapid development of the international intra-product specialization in East Asia? Is the system of intra-product specialization in East Asia stable? If the answer is negative, how can we strengthen the stability in future? To solve these problems. this paper is divided into seven parts discussed in detail:Chapter I:Introduction. In this part it introduces its research background and significance, study motifs. structure, methods and the main content arrangement, the probable innovations and insufficiencies.Chapter Ⅱ:reviews of related literatures. This part summarizes the related literature from three angles. Firstly there are the basic theories about intra-product specialization. It generalizes the literatures from the traditional trade theories, new trade theories and the theories introducing industrial organization theory. Based on that it concludes the insufficiencies of current studies. Secondly it is about the empirical research which shows the different measurement methods of intra-product specialization and appraises these methods. After that it summarizes the empirical research within or out of the region of East Asia. Thirdly it is about the system stability of intra-product specialization. It introduces the theoretical boots of division of labor’stability, the research from the field of management and from the field of international economics about this issue.Chapter Ⅲ:the development and present situation of intra-product specialization in East Asia. In this chapter it analyzes the characteristics of intra-product specialization and trade in East Asia from these angles as followed:the growth history of intra-product trade in this region, the structure changes (indicates the degree changes that each economy takes part in the intra-product specialization), the status and the status changes of this form of specialization for each economy in East Asia.Chapter Ⅳ:the motivation of intra-product specialization in East Asia. This chapter is about the theory and the empirical research. Firstly, it analyzes the motivation of intra-product specialization from the angel of basic theory of division of labor and specialization. Secondly, it introduces the benefits and costs sources of intra-product specialization in this region. After that it analyzes the decision of intra-product specialization degree. Lastly, it examined the determinants of intra-product trade in East Asia by panel data models based on the data from the1990s to the present.Chapter Ⅴ studies the stability of intra-product specialization system. Firstly, it analyzes the condition that the intra-product specialization system can run stably, and the factors which affect the system’s stability. Secondly, it gives detail analysis about the issue by focusing on two factors as followed:one is that the intra-product specialization is of natural instability comparative with horizontal specialization because it is a form of vertical specialization and is of special characteristics. The other is that the division of labor system can be complete because it depends highly on the demand of the market outside the region, it means the production is within the region but the consumption is mainly outside the region. This makes the whole intra-product specialization system has always been subject to external demand, as long as the external demand changes, the entire division system will change.Chapter VI studies the strategy direction choice to strengthen the stability of the intra-product specialization system. It puts forward the solutions for the analysis of Chapter V, and concludes that the current situation should be improved from such angles as expanding horizontal intra-industry specialization and expanding the demand for final product in East Asia in future. Then it gives some policy recommendations on basis of discussing on the determinants of horizontal intra-industry specialization and of demand for final products in East Asia.Chapter VII is the conclusion and the research prospects for future.