Vertical Gravity
Brooks, Douglas H.; Ferrarini, Benno | July 2012
Abstract
The paper examines the drivers of international production networks and vertical trade integration in an augmented gravity model that employs the newly developed Network Trade Index as a regressant. Based on bilateral trade data among 75 countries from 1998 to 2005, the findings emphasize trade policy’s role in facilitating network trade. For example, a 10% tariff reduction raises vertical trade by 6.2%, on average. Preferential trade agreements are found to significantly boost vertical integration.
Citation
Brooks, Douglas H.; Ferrarini, Benno. 2012. Vertical Gravity. © Asian Development Bank. http://hdl.handle.net/11540/1604.ISSN
1655-5252
Keywords
Economics
Public Sector
Free Trade
Health
Trade
Development
Economic integration
Regional integration
Show allCollapse
Citable URI
http://hdl.handle.net/11540/1604Metadata
Show full item record
Users also downloaded
-
Growth and Trade Horizons for Asia: Long-term Forecasts for Regional Integration
(Asian Development Bank, 2005-11-01)With the emergence of People’s Republic of China (PRC) and India, the economic landscape of Asia and its relation to the global economy have been changed. Using the new dynamic global model, we present forecasts for Asian expansion over 2025. These ... -
The 'Sophistication' of Exports: A New Measure of Product Characteristics
(Asian Development Bank, 2005-01-15)As the organization of trade changes with ‘fragmentation’, there is also interest among developing countries in entering production networks that have the potential to raise exports and transfer new skills and technology.3 Since, as noted, activities ... -
Evolving Regional Financial Architecture in East Asia
(Asian Development Bank, 2008-02-15)The 1997-98 Asian financial crisis and contagion revealed how closely financial systems and economic conditions were interconnected across East Asia. This policy brief explores the background and progress of recent financial cooperation initiatives in ...