Trade, Networks and Hierarchies pp 347-364 | Cite as

# Vertical Specialization and Interregional Trade: Hierarchy of Spatial Production Cycles and Feedback Loop Analysis in the Midwest Economy

Chapter

## Abstract

The renewed interest in international trade has drawn attention to the phenomenon of vertical specialization, the use of imported inputs for producing goods that are exported (see Bruelhart and Hine, 1999). Balassa (1967, p.97) coined the term, vertical specialization; in a recent paper, Hummels

*et al*, (1998) introduced and discussed the following definition of vertical specialization:(1) a good must be produced in multiple sequential stages, (2) two or more countries must specialize in producing some, but not all, stages, and (3) at least one stage must cross an international border more then once… Thus, countries link sequentially to produce a final good.

## Keywords

Feedback Loop Trade Flow Vertical Specialization Intraindustry Trade Interregional Trade
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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