Economics Dictionary of ArgumentsHome
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| Production sharing: In economics, "production sharing" primarily refers to the fragmentation of the production process across different countries. This means that various stages of producing a good (e.g., design, component manufacturing, assembly, marketing) occur in different locations globally, leveraging each country's comparative advantages in factors like labor costs or specialized skills. It's a key aspect of global supply chains and international trade. See also Production, Production structure, Production theory, International trade._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Robert C. Feenstra on Production Sharing - Dictionary of Arguments
Feenstra I 4-2 Production Sharing/Feenstra: [There are] traded intermediate inputs, caused by firms splitting apart their production process across several countries. This is sometimes called “production sharing” by the companies involved, or simply “outsourcing.”* The idea that trade in intermediate inputs can have an effect on production and factor prices that is different from trade in final goods is gaining widespread acceptance among trade economists (…).** *Alternatively referred to as outsourcing (Katz and Murphy, 1992(1), Feenstra and Hanson, 1996(2)), de-localization (Leamer, 1996)(3), fragmentation (Jones and Keirzkowski, 1997, Arndt and Kierzkowski, 2000(4), Marjit and Acharyya, forthcoming), intra-product specialization (Arndt, 1997 and 1998a(5),b(6)), intra-mediate trade (Antweiler and Trefler, 2002(7)), vertical specialization (Hummels, Ishii, and Yi, 2001(8)), and slicing the value chain (Krugman, 1995(9)), this phenomena refers to the geographic separation of activities involved in producing a good (or service) across two or more countries. **The term „production sharing” was coined by management consultant Peter Drucker (“The Rise of Production Sharing,” The Wall Street Journal, March 15, 1977). 1. Katz, Lawrence F. and Kevin M. Murphy, 1992, “Changes in Relative Wages, 1963-1987: Supply and Demand Factors,” Quarterly Journal of Economics, 107, February, 35-78. 2. Feenstra, Robert C. and Gordon H. Hanson, 1996, “Foreign Investment, Outsourcing and Relative Wages,” in R.C. Feenstra, G.M. Grossman and D.A. Irwin, eds., The Political Economy of Trade Policy: Papers in Honor of Jagdish Bhagwati, MIT Press, 1996, 89-127. 3. Leamer, Edward E., 1996, “The Effects of Trade in Services, Technology Transfer and Delocalisation on Local and Global Income Inequality,” Asia-Pacific Economic Review, 2, 44-60. 4. Arndt, Sven and Henryk Kierzkowski, eds., 2001, Fragmentation: New Production and Trade Patterns in the World Economy, Oxford University Press, Oxford. 5. Arndt, Sven, 1998a, “Globalization and the Gains from Trade,” in K. Jaeger and K.-J. Koch, eds. Trade, Growth and Economic Policy in Open Economies. SpringerVerlag: New York. 6. Arndt, Sven, 1998b, “Super-Specialization and the Gains from Trade,” Contemporary Policy Issues, Western Economic Association, forthcoming. 7. Antweiler, Werner and Daniel Trefler, 2002, “Increasing Returns and All That: A View from Trade,” American Economic Review, 92(1), March, 93-119. 8. Hummels, David, Jun Ishii, and Kei-Mu Yi, 2001, “The Nature and Growth of Vertical Specialization in World Trade,” Journal of International Economics, 54, 75-96. 9. Krugman, Paul, 1995, “Growing World Trade: Causes and Consequences,” Brooking Paper on Economic Activity, 1, 327-362._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Feenstra I Robert C. Feenstra Advanced International Trade University of California, Davis and National Bureau of Economic Research 2002 |
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