Global Production Sharing, Trade Patterns, and Determinants of Trade Flows in East Asia

Global production sharing—the breakup of a production process into vertically separated stages that are carried out in different countries—has become one of the defining characteristics of world trade over the past few decades. Any analysis of trade patterns or its determinants that ignores this phenomenon, and the trade in parts and components that it generates, is likely to result in erroneous conclusions. This study examines the extent and pattern of these flows, focusing on East Asia, and probes its implications for the analysis of the determinants of trade flows. World trade in parts and components increased from about 18.9% to 22.3% of total exports between 1992/93 and 2005/06. Most of this growth emanates from East Asia, with its share in total world exports increasing from 27% to 39% over the same period. There was a notable decline in Japan’s share toward the end of this period, but this was more than offset by the rising importance of the People's Republic of China (PRC). In East Asia, most of this trade is in electronics. The econometric analysis reveals that parts and components are remarkably less sensitive to changes in relative prices; as a result, the sensitivity of aggregate trade flows to relative price changes diminishes as its share increases. This implies that exchange rate policy may be less effective in balance of payments adjustment, in countries where component trade is high and growing.Global production sharing; product fragmentation trade; determinants of trade flows; exchange rate policy

Energy security issues in contemporary Europe

Throughout the history of mankind, energy security has been always seen as a means of protection from disruptions of essential energy systems. The idea of protection from disorders emerged from the process of securing political and military control over energy resources to set up policies and measures on managing risks that affect all elements of energy systems. The various systems placed in a place to achieve energy security are the driving force towards the energy innovations or emerging trends in the energy sector. Our paper discusses energy security status and innovations in the energy sector in European Union (EU). We analyze the recent up-to-date developments of the energy policy and exploitation of energy sources, as well as scrutinize the channels of energy streaming to the EU countries and the risks associated with this energy import. Moreover, we argue that the shift to the low-carbon production of energy and the massive deployment of renewable energy sources (RES) might become the key issue in ensuring the energy security and independency of the EU from its external energy supplies. Both RES, distributed energy resources (DER) and “green energy” that will be based on the energy efficiency and the shift to the alternative energy supply might change the energy security status quo for the EU

Export Dynamism and Market Access

trade flows, trade liberalization, international production networks, development policy

Spatial determinants of Japanese manufacturing firms in the Czech Republic

This study casts light upon the locational distribution of industrial activites of Japanese multinational corporations (MNCs) in the Czech Republic at the regional level from 1999 through 2004. In our study, McFadden's conditional logit model is applied to trace the dynamic effects of a series of factors on locational choices of Japanese MNCs. We found evidence that the locational choice of Japanese MNCs is positively affected by industrial agglomeration effects resulting from potential interactions across and within existing Japanese and foreign firms owing to mitigation of various transaction costs. In addition, the presence of well-developed infrastructure systems and high wage level determine the location choice of Japanese MNCs, while distance matters. The empirical evaluation also contends that spatial determinants of MNCs vary by nationality in the Czech Republic. It is evident that agglomeration externalities and distance emerge as critical driving factors for Japanese MNCs and Asian MNCs. On the other hand, it has been verified that fiscal and financial incentives tend to highly motivate German MNCs, while local demand conditions have a great impact on Anglo-American MNCs. --regional attributes,agglomeration,Japanese FDI,conditional logit model,the Czech Republic,regional disparity,Japanese manufacturing start-ups,localization

Japanese Aid as a Prerequisite for FDI : The Case of Southeast Asian Countries

This study investigates the nexus between Japans official development assistance and foreign direct investment inflows in Southeast Asian countries. An analysis of the geographical and sectoral decomposition of aid flows reveals that assistance programs were mainly allocated in the form of loans for economic infrastructure projects. This orientation attests that the needs of the recipient country are taken into account but also reveals that it is in keeping with a return on investment. Conditional logit analysis shows that Japanese aid flows did have a significant positive impact on private investors location choice even though other profit-maximising factors such as agglomeration effects or the quality of infrastructure had a leading spill-over effect. In a context of growing scarcity of aid funding, the study concludes by asserting the importance of a complementary process in which foreign aid is directed towards the development of infrastructure, acting as a pre-requisite for future direct investments. Finally, Japan providing an interesting case study, we will stress the need for a better cooperation between the public and private sectors in development assistance programs.Japan, official development assistance, Aid, investment, Infrastructure

Industrial Symbiosis for a Sustainable City: Technical, Economical and Organizational Issues

In this paper, we propose the adoption of industrial symbiosis approach within cities as a tool to improve their environmental sustainability. In particular, organic waste can be used to produce electric energy required by cities. In this way, a resource closed loop is generated, able to reduce the amount of waste disposed of in landfill and the energy purchased from outside the city. We develop a conceptual model that identifies symbiotic flows and processes that generate and receive them. We model these processes using the input-output approach. An efficiency measure of the symbiotic approach within urban areas has been proposed. Finally, we employ three case examples in order to show how the model works. As a result, we provide some useful managerial suggestions for policy makers about the implementation of industrial symbiosis within cities