Learning-by-Exporting: Micro-dynamic Evidence from Taiwan

( Deng Shing Huang ),( Pei Chou Lin ),( Yo Yi Huang ) 연세대학교 동서문제연구원 2006 Global economic review Vol.35 No.4

Market-Driven Trading Blocs in East Asia: Empirical Evidence from 1980 to 2000

( Deng Shing Huang ) 세종대학교 경제통합연구소 (구 세종대학교 국제경제연구소) 2008 Journal of Economic Integration Vol.23 No.2

In this paper we apply the gravity model to provide empirical evidence of market-driven trading blocs in East Asia for the period from 1980 to 2000. Special attention is paid on the role of mainland China`s openness in shaping East Asia`s trade pattern. Several trading blocs are empirically supported from the regression. (1) Firstly, there is significant evidence of a trading bloc within a Chinese circle, including Taiwan, Hong Kong, and mainland China. Although trade flows between Taiwan and mainland China were severely suppressed before 1987, the Chinese circle as a whole is highly integrated in terms of trade, indicating the important role Hong Kong plays as a trading agent in the Chinese circle. (2) The East Asian bloc appeared in the late 1980s and became more and more significant in the early 1990s. Although the bloc phenomenon in East Asia weakened right after the Asian crisis, it re-fostered again a few years later.

Technology Advantage and Home-market Effect: An Empirical Investigation

( Deng Shing Huang ),( Yo Yi Huang ) 세종대학교 경제통합연구소(구 세종대학교 국제경제연구소) 2011 Journal of Economic Integration Vol.26 No.1

According to the conventional home-market effect, free trade tends to shrink the market share for a small economy in differentiated manufacturing goods, and in the extreme leads to a complete hollowing-out of the industry in a small economy. This paper considers the technology difference between countries using the standard Helpman-Krugman model. We will show that the home-market effect can be offset and even reversed if the smaller economy is characterized by better technology. The effect of a technology advantage is composed of two parts: a direct effect from lower unit costs that leads to a higher output level of each firm, and an indirect effect through a change of survival firms after trade. Based on theoretical results we derive the gravity equation to undertake empirical tests on the hypothesis of home-market effect, and direct and indirect technology effects using the stock of each country`s patent registered in US in 2002 for six industries ranging from the most technology-intensive semiconductor industry to the most labor-intensive apparel and clothing industry. Empirical results show that the degree of home-market effect varies from industry to industry. The reversal of the home-market effect due to counteracting direct and indirect technology effects is more likely to occur in technology-intensive industries. In this regards, any technology improving policy like R&D subsidies is always justifiable especially for a small open economy and for high-tech industries to prevent from being marginalized by a large economy.

On the Feasibility of Economic Cooperation in East Asia: Perspectives from Trade Creation and Trade Diversion

( Deng Shing Huang ),( Jenn Hwa Tu ) 세종대학교 경제통합연구소 1994 Journal of Economic Integration Vol.9 No.3

This paper attempts to measure the feasibility of economic cooperation in East Asia from an economic point of view. To approach this issue, we decompose the effect of economic cooperation into trade creation (TC) and trade diversion (TD) by using the well-known revealed comparative advantage (RCA) index. Diversity in the RCA indices among member countries should be closely related to the magnitude of TC. On the other hand, TD occurs in the case of a union in goods in which the outside region as a whole has a comparative advantage. In addition, members who suffer from TD will be those that have a low RCA index and thus have to import. The results show that the export structures differ quite significantly between ASEAN and the NICs. Based on the RCA index, we would expect an intraregional trade creation effect in the case of commodity groups 1 (agriculture), 2 (mining), 31 (food, beverages and tobacco), 32 (textiles), 33 (wood & products) and 39 (other manufactures) if ASEAN and the NICs form a union. Since Japan has a revealed comparative advantage in commodity groups 37 (basic metals) and 38 (metal manufactures), excluding it from the union would induce TD in these goods and the importing member countries will thus suffer. Therefore, if Japan is included into the union, trade diversion in the case of goods 37 and 38 disappears, and trade creation follows. However, for goods 31 (food, beverages and tobacco), 34 (Paper and products), and 35 (chemicals), in which these ten countries, as a whole, have a comparative disadvantage compared with the rest of the world, TD is inevitable. Again, countries that have to import or have a comparative disadvantage in these goods will suffer from trade diversion.

Production Specialization and Trade Blocs

( Deng Shing Huang ),( Yo Yi Huang ),( Ying Chih Sun ) 세종대학교 경제통합연구소 (구 세종대학교 국제경제연구소) 2006 Journal of Economic Integration Vol.21 No.3

Using the clustering analysis and gravity model, this paper investigates the evolution of likely trade-bloc phenomenon for the textile industry and the automatic data processing industry for the last three decades. For the textile industry, a significant two-bloc phenomenon could be identified, one declining bloc mainly composed of the European countries, and the other rising bloc of countries around Pacific Rim. For the automatic data processing industry, only one trade bloc could be identified. However, the core countries have gradually changed from those of Europe and USA to the countries of East Asia over the period.

Market-Driven Trading Blocs in East Asia:Empirical Evidence from 1980 to 2000

Deng-Shing Huan 세종대학교 경제통합연구소 2008 Journal of Economic Integration Vol.23 No.2

In this paper we apply the gravity model to provide empirical evidence of market-driven trading blocs in East Asia for the period from 1980 to 2000. Special attention is paid on the role of mainland China’s openness in shaping East Asia’s trade pattern. Several trading blocs are empirically supported from the regression. (1) Firstly, there is significant evidence of a trading bloc within a Chinese circle, including Taiwan, Hong Kong, and mainland China. Although trade flows between Taiwan and mainland China were severely suppressed before 1987, the Chinese circle as a whole is highly integrated in terms of trade, indicating the important role Hong Kong plays as a trading agent in the Chinese circle. (2) The East Asian bloc appeared in the late 1980s and became more and more significant in the early 1990s. Although the bloc phenomenon in East Asia weakened right after the Asian crisis, it re-fostered again a few years later. JEL classification: F14, F15 In this paper we apply the gravity model to provide empirical evidence of market-driven trading blocs in East Asia for the period from 1980 to 2000. Special attention is paid on the role of mainland China’s openness in shaping East Asia’s trade pattern. Several trading blocs are empirically supported from the regression. (1) Firstly, there is significant evidence of a trading bloc within a Chinese circle, including Taiwan, Hong Kong, and mainland China. Although trade flows between Taiwan and mainland China were severely suppressed before 1987, the Chinese circle as a whole is highly integrated in terms of trade, indicating the important role Hong Kong plays as a trading agent in the Chinese circle. (2) The East Asian bloc appeared in the late 1980s and became more and more significant in the early 1990s. Although the bloc phenomenon in East Asia weakened right after the Asian crisis, it re-fostered again a few years later. JEL classification: F14, F15

On the Feasibility of Economic Cooperation in East Asia : Perspectives from Trade Creation and Trade Diversion

Huang, Deng-Shing,Tu, Jenn-Hwa 세종대학교 국제경제연구소 1994 Journal of Economic Integration Vol.9 No.3

This paper attempts to measure the feasibility of economic cooperation in East Asia from an economic point of view. To approach this issue, we decompose the effect of economic cooperation into trade creation (TC) and trade diversion (TD) by using the well-known revealed comparative advantage (RCA) index. Diversity in the RCA indices among member countries should be closely related to the magnitude of TC. On the other hand, TD occurs in the case of a union in goods in which the outside region as a whole has a comparative advantage. In addition, members who suffer from TD will be those that have a low RCA index and thus have to import. The results show that the export structures differ quite significantly between ASEAN and the NICs. Based on the RCA index, we would expect an intraregional trade creation effect in the case of commodity groups 1 (agriculture), 2 (mining), 31 (food, beverages and tobacco), 32 (textiles), 33 (wood & products) and 39 (other manufactures) if ASEAN and the NICs form a union. Since Japan has a revealed comparative advantage in commodity groups 37 (basic metals) and 38 (metal manufactures), excluding it from the union would induce TD in these goods and the importing member countries will thus suffer. Therefore, if Japan is included into the union, trade diversion in the case of goods 37 and 38 disappears, and trade creation follows. However, for goods 31 (food, beverages and tobacco), 34 (paper and products), and 35 (chemicals), in which these ten countries, as a whole, have a comparative disadvantage compared with the rest of the world, TD is inevitable. Again, countries that have to import or have a comparative disadvantage in these goods will suffer from trade diversion.

Evolution of the Textile Production Chain in East Asia from the Hub-Spoke Structure Viewpoint

Tzu-Han Yang,Deng-Shing Huang,Yo-Yi Huang 세종대학교 경제통합연구소 2020 Journal of Economic Integration Vol.35 No.4

This research utilizes hub-spoke analysis to trace the evolution of the textile production chain in East Asia during the period of world textile trade liberalization. We identify two different types of hubs via the functions they perform and track their shifting paths. The results illustrate that the Association of Southeast Asian Nations (ASEAN)-6 is a growing base for final products, while China has successfully shifted from downstream to mid- and upstream production. Although Japan’s hubness is decreasing in both the up- and midstream sectors, it reversed these disadvantages after 2004 and has reinforced its hub status in both areas. It appears that a tri-cycle momentum system is evolving, with each power wheel having its own leading position in the vertically integrated structure. At the same time, the cooperation between China and Japan through up- and midstream product trading has weakened, while that between ASEAN and Japan has grown.