International Fragmentation and Agglomeration: From Theory to Empirics

Abstract

This paper deals with fragmentation both theoretically and empirically. Not only it presents a picture of the existing literature on the field but it also provides some basic hints for future investigation. It pays particular attention to the possible theoretical dichotomy between fragmentation and agglomeration, whilst supplying empirical evidence in support of their coexistence. Moreover, the paper focuses on the linkages between fragmentation and trade, with an emphasis on vertical intra-industry trade in intermediates. Eventually, the contribution stresses that much more attention should be paid on how fragmentation shapes the role of industrial districts within the international organisation of production. Further investigation from different strands of literature (GVCs and GPNs) is needed to shed some light on the role of local production systems in the global architecture of manufactures.Fragmentation, agglomeration, intra-industry trade, Global Value Chains, Global Production Networks