Comparative Advantage in the Asian Automotive Industry

This paper seeks to analyze determinants of Asian countries' comparative advantage in the automotive industry. The effects of supporting industries, factor availability, factor intensity, transportation costs, and of the scale of foreign investment in the industry on the level of countries' comparative advantage are on focus. The results highlight the importance of strong supporting industries in raising a country's comparative advantage in the automotive industry. Furthermore, it is found that the role of factor endowments and intensities, and the role of the presence of Japanese firms, also became more important in determining a country's comparative advantage in the automotive industry following the decline in government intervention in the automotive industry. In addition, transportation costs play an important role in promoting costly-to-transport products to be likely to be produced in countries where there exists large local demand.

Timeliness, Trade and Agglomeration

An important element of the cost of distance is time taken in delivering final and intermediategoods. We argue that time costs are qualitatively different from direct monetary costs such asfreight charges. The difference arises because of uncertainty. Unsynchronised deliveries candisrupt production, and delivery time can force producers to order components beforedemand and cost uncertainties are resolved. Using several related models we show that thiscan cause clustering of component production. If final assembly takes place in two locationsand component production has increasing returns to scale, then component production willtend to cluster around just one of the assembly plants.Just- in-time, clustering, location, trade.

The China Puzzle: Theory and Evidence on the Behavior of Chinese Exports during the 2008-2009 Global Financial Crisis

Many studies link the recent collapse in trade during the 2008-09 financial crisis to a decrease in the demand for durable and investment goods in crisis-hit countries. Thus, a remarkable feature of the recent collapse in international trade is that China’s export sectors – for which the crisis-hit U.S. and Europe are the primary destinations – appear much less affected than their counterparts in other exporting countries. This paper explains the puzzle by documenting a new stylized fact: China’s processing exports fell much less than ordinary trade during the 2008-09 financial crisis, even conditioning on industry and demand in the destination country. It then investigates a range of explanations for the special behavior of processing trade

Timeliness, Trade and Agglomeration

An important element of the cost of distance is time taken in delivering final and intermediate goods. We argue that time costs are qualitatively different from direct monetary costs such as freight charges. The difference arises because of uncertainty. Unsynchronised deliveries can disrupt production, and delivery time can force producers to order components before demand and cost uncertainties are resolved. Using several related models we show that this generates hitherto unexplored incentives for clustering. If final assembly takes place in two locations and component production has increasing returns to scale, then component production will tend to cluster around just one of the assembly plants.

A translator writing system for microcomputer high-level languages and assemblers

In order to implement high level languages whenever possible, a translator writing system of advanced design was developed. It is intended for routine production use by many programmers working on different projects. As well as a fairly conventional parser generator, it includes a system for the rapid generation of table driven code generators. The parser generator was developed from a prototype version. The translator writing system includes various tools for the management of the source text of a compiler under construction. In addition, it supplies various default source code sections so that its output is always compilable and executable. The system thereby encourages iterative enhancement as a development methodology by ensuring an executable program from the earliest stages of a compiler development project. The translator writing system includes PASCAL/48 compiler, three assemblers, and two compilers for a subset of HAL/S

Are Japanese Firms Failing to Catch up in Localization? An Empirical Analysis Based on Affiliate-level Data of Japanese Firms and a Case Study of the Automobile Industry in China

This paper analyzes the degree and the current status of localization of Japanese affiliates in China. For this purpose, we (1) compare the localization (measured in terms of the number of expatriates, local sales, local procurement, and local management) of Japanese and U.S. affiliates in China and other major regions; (2) analyze the impact of localization on the profitability of Japanese affiliates in China and in other major regions; and (3) conduct a detailed investigation of inter-firm transactional relationships in China between automobile manufacturers and parts suppliers. We find that compared with U.S. affiliates, Japanese affiliates tend to be less localized. Using a comprehensive affiliate-level panel data set on Japanese multinationals and concentrating on China, we then examine the effect of localization quantitatively and find that Japanese affiliates with higher procurement ratios and/or local CEOs and procurement managers enjoyed high profits. Next, turning to the factors determining trading relationships between assemblers and suppliers of different nationalities in China, our analysis suggests that even when taking various control variables into account, such as suppliers' productivity level and the distance between assembler and supplier, the transactional relationships of Japanese suppliers are more limited than those of suppliers of other nationalities. Moreover, Japanese automobile assemblers do not choose suppliers based on their current labor productivity level and transactional relationships between assemblers and suppliers are more closed in the case of Japanese firms than in the case of firms of other nationalities. On the other hand, we find that auto parts suppliers dealing with Japanese assemblers see their productivity grow faster regardless of the supplier's nationality. The results indicate that Japanese assemblers may well be choosing business partners which they expect to realize sustainable productivity increases in the future rather than focusing on present productivity levels. This finding provides evidence of business practices based on a long-term perspective characteristic of Japanese enterprises.