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Production sharing in Latin American trade: a research note

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  • Ventura Dias, Vivianne
  • Durán Lima, José Elías
Abstract
The recent literature on industry globalisation and global production sharing has called attention to the changing nature of world trade with the predominance of trade in manufactures, the fragmentation of the production process and contractual relations between firms. Even when those changes do not question the most fundamental notion of trade and production specialisation according to factor services endowments, the literature points to a specialisation within a narrow set of activities and likely to be more fragmented. Enterprises may select labour intensive activities from a number of predominantly labour as well as from capital intensive industries initially located in industrial countries to relocate them in developing countries. Nevertheless, those activities can be reconverted to industrial countries if and when technological change makes their consolidation more profitable. Mexico has a history of integrating its economy with that of the United States and of full adoption of production sharing as a strategy of integrating its economy into the world economy. On the other extreme, Brazil has been oriented towards its domestic market and more recently towards the regional market. Even though imported inputs have increased after trade liberalisation, proportion to domestically produced inputs is still moderate. The contrasting experience of the two countries is an open field for research.

Suggested Citation

  • Ventura Dias, Vivianne & Durán Lima, José Elías, 2001. "Production sharing in Latin American trade: a research note," MPRA Paper 4527, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:4527
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    References listed on IDEAS

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    Cited by:

    1. Mattos, José Carlos Silva & Acosta, María José, 2003. "Maritime transport liberalization and the challenges to further its implementation in Chile," Comercio Internacional 4387, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

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    More about this item

    Keywords

    Product sharing: International trade: vertical specialisation: trade patterns;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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