Advertisement

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

  • Michael Sonis
  • Geoffrey J. D. Hewings
  • Yasuhide Okuyama
Part of the Advances in Spatial Science book series (ADVSPATIAL)

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.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Balassa, B. 1967. Trade Liberalization among Industrial Countries. New York, McGraw Hill.Google Scholar
  2. Bruelhart, M. and R.C. Hine, eds. 1999. Intra-industry Trade and Adjustment. New York, St. Martins Press.Google Scholar
  3. Christofides, W. 1975. Graph Theory: An algorithmic Approach. New York, Academic Press.Google Scholar
  4. Dantzig, G.B. 1963. Linear Programming and Extensions. Princeton University Press.Google Scholar
  5. Defourny J. and E. Thorbecke. 1984. “Structural Path Analysis and Multiplier Decomposition within a Social Accounting Matrix Framework.” Economic Journal, 94, 111–136.CrossRefGoogle Scholar
  6. Gower, J.C. 1977. “The analysis of symmetry and orthogonality.”. In J.R. Barra, ed. Recent Developments in Statistics. Amsterdam, North Holland. pp. 109–123.Google Scholar
  7. Feinberg, S. 1970. “An Iterative Process for Estimation of Contingency Tables.” Annals of Mathematical Statistics, 41, 907–917.CrossRefGoogle Scholar
  8. Hewings, G.J.D., P.R. Israilevich, Y. Okuyama, D.K. Anderson, G.R. Schindler, M. Foulkes and M. Sonis. 1997. “Returns to scope, returns to trade and the structure of spatial interaction in the US Midwest,” Discussion Paper 97-P-3, Regional Economics Applications Laboratory, University of Illinois, Urbana.Google Scholar
  9. Hewings, G.J.D., M. Sonis, J. Guo, P.R. Israilevich and G.R. Schindler. 1998. “The Hollowingout Process in the Chicago Economy, 1975–2011.” Geographical Analysis, 30, 217–223.CrossRefGoogle Scholar
  10. Hummels, D., D. Rappoport and K-M. Yi. 1998. “Vertical Specialization and the Changing Nature of Word Trade.” Federal Reserve Bank of New York, Economic Policy Review, June 1998.Google Scholar
  11. Jurcat W.D. and H.J. Ryser. 1967. “Term Ranks and Permanents of Nonnegative Matrices.” Journal of Algebra, 5, 342–357.CrossRefGoogle Scholar
  12. Krugman, P. 1991. “Is Bilateralism bad?” In E. Helpman and A. Razin, eds. International Trade and Trade Policy. Cambridge, MIT Press. pp. 9–23.Google Scholar
  13. Krugman P. 1993. “Regionalism versus multilateralism: analytical notes.” In J. De Melo and A. Panagaria, eds. New Directions in Regional Integration. Cambridge University Press. pp.58–79.CrossRefGoogle Scholar
  14. Polenske, K.R. 1970a. “Empirical estimation of interregional input-output models: estimation of 1963 Japanese production.” American Economic Review, 60, 76–82.Google Scholar
  15. Polenske, K.R. 1970b. “Empirical implementation of a multiregional input-output gravity trade model.” In A.P. Carter and A. Bródy, eds. Contributions to Input-Output Analysis. Amsterdam, North Holland.Google Scholar
  16. Martins, E.B. 1993. “Notes on the construction of the 1992 Illinois input-output table.” Discussion Paper 93-T-2, Regional Economics Applications Laboratory, University of Illinois, Urbana.Google Scholar
  17. Richardson, L.F. 1922. Weather Prediction by Numerical Process. Cambridge University. Press.Google Scholar
  18. Slater, D.B. 1981. “Combinatorial Procedures for Structuring Internal Migration and other Transaction Flows.” Quality and Quantity, 15, 179–202.CrossRefGoogle Scholar
  19. Sonis, M. 1980. “Location Push-Pull Analysis of Migration Streams.” Geographical Analysis, 12, 80–97.CrossRefGoogle Scholar
  20. Sonis, M. 1982. “The Decomposition Principle versus Optimization in Regional Analysis — the Inverted problem of Multiobjective Programming.” In G.P. Chiotis, D.A. Tsoukalas, H.D. Louri, eds. The Regions and Enlargement of European Economic Community. School of Economics and Business Science, Athens.Google Scholar
  21. Sonis, M. and G.J.D. Hewings. 1990. “The ‘Matrioshka Principle’ in the hierarchical decomposition of multiregional social accounting systems.” In L. Anselin and M. Madden, (eds. New Directions in Regional Analysis: Integrated and Multiregional Approaches. London, Pinter.Google Scholar
  22. Sonis, M., J. Oosterhaven and G.J.D. Hewings. 1993. “Spatial Economic Structure and Structural Changes in the European Common Market: Feedback Loop Input-Output Analysis.” Economic Systems Research, 5, 173–184.CrossRefGoogle Scholar
  23. Sonis, M., G.J.D. Hewings and R. Gazel. 1995a. “The structure of multi-regional trade flows: Hierarchy, Feedbacks and Spatial Linkages.” The Annals of Regional Science, 29, 409–430.Google Scholar
  24. Sonis, M., J.J.M. Guilhoto and G.J.D. Hewings. 1995b. “The Asian Economy: Trade Structure interpreted by Feedback Loop Analysis.” Journal of Applied Input-Output Analysis, 2, 24–40.Google Scholar
  25. Sonis, M., G.J.D. Hewings, J. Guo and E. Hulu. 1997. “Interpreting Spatial Economic Structure: Feedback Loops in the Indonesian Economy, 1980–1985.” Regional Science and Urban Economics, 27, 325–342.CrossRefGoogle Scholar
  26. Sonis, M., G.J.D. Hewings, and S. Sulistyowati. 1997. “The Structure of the Indonesian Economy: A Generalized Structural Path Analysis.” Economic Systems Research 9, 265–280.CrossRefGoogle Scholar
  27. Sonis, M., G.J.D. Hewings, and Y. Okuyama. 2000. “Vertical Specialization and Interregional Trade: Turbulence Analogy and Feedback Loops Analysis of the Midwest Economy.” In H. Herrmann and J. Bröcker, eds. Spatial Change and Interregional Flows in the Integrating Europe. Heidelberg, Physica-Verlag.Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 2002

Authors and Affiliations

  • Michael Sonis
    • 1
    • 2
  • Geoffrey J. D. Hewings
    • 1
  • Yasuhide Okuyama
    • 3
  1. 1.Regional Economics Applications LaboratoryUniversity of IllinoisUSA
  2. 2.Bar Ilan UniversityIsrael
  3. 3.Department of PlanningState University of New York at BuffaloUSA

Personalised recommendations