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Intermediate trade in global value chains and its role in final demand, price and business cycle co-movement

This study assessed ASEAN-4 participation in regional value chain as downstream suppliers and their external trade relations with the upstream suppliers China and Japan. The first objective examines the relationship between final demand and intermediate imports at aggregated and disaggregated levels...

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Main Author: Siow, Hui Sian
Format: Thesis
Language:English
Published: 2021
Subjects:
Commerce
Business cycles
Online Access:http://psasir.upm.edu.my/id/eprint/105509/1/SPE%202022%2021%20UPM%20IR.pdf
http://psasir.upm.edu.my/id/eprint/105509/
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spelling my.upm.eprints.1055092024-02-09T02:05:35Z http://psasir.upm.edu.my/id/eprint/105509/ Intermediate trade in global value chains and its role in final demand, price and business cycle co-movement Siow, Hui Sian This study assessed ASEAN-4 participation in regional value chain as downstream suppliers and their external trade relations with the upstream suppliers China and Japan. The first objective examines the relationship between final demand and intermediate imports at aggregated and disaggregated levels. Second objective assess the impact of a computed import price on intermediate imports, exchange rate pass through (ERPT) and elasticity of substitution (EOS). While the third objective compare the effect of intermediates trade on the business cycle co-movement between China–ASEAN-4 and Japan–ASEAN-4. Autoregressive Regressive Distributed Lag (ARDL) Bounds test was used for the first and third objective while the second objective used Panel ARDL technique for dataset from 1970 to 2015. Three main findings were extracted from the analysis. Firstly, the findings based on the first objective showed a positive impacts of final demand fluctuation on import of intermediates. Second objective analysis reveals that compared to the domestic price, import price was less significant in determining demand of intermediates import. Moreover, ERPT suggests that firms in ASEAN-4 tend to absorb the fluctuation in import prices and maintain domestic price stability. The findings from third objective indicates trade in intermediates is significant in influencing business cycle co-movement between downstream suppliers and upstream suppliers. The empirical results imply that a growing ASEAN-4 is likely to create more demand for intermediates within the region and thus policy that drive trade integration in the region is expected to benefit all. Moreover, import price is less significant in determining imports, thus implying competition on non-price factor in between domestic intermediates and imported intermediates. The result also reveals that more trade in intermediates will cause business cycle co-movement. Therefore, countries should formulate appropriate international trade policy by carefully evaluating the cost and benefits of value chain participation at the regional level. 2021-07 Thesis NonPeerReviewed text en http://psasir.upm.edu.my/id/eprint/105509/1/SPE%202022%2021%20UPM%20IR.pdf Siow, Hui Sian (2021) Intermediate trade in global value chains and its role in final demand, price and business cycle co-movement. Doctoral thesis, Universiti Putra Malaysia. Commerce Business cycles
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
topic Commerce
Business cycles
spellingShingle Commerce
Business cycles
Siow, Hui Sian
Intermediate trade in global value chains and its role in final demand, price and business cycle co-movement
description This study assessed ASEAN-4 participation in regional value chain as downstream suppliers and their external trade relations with the upstream suppliers China and Japan. The first objective examines the relationship between final demand and intermediate imports at aggregated and disaggregated levels. Second objective assess the impact of a computed import price on intermediate imports, exchange rate pass through (ERPT) and elasticity of substitution (EOS). While the third objective compare the effect of intermediates trade on the business cycle co-movement between China–ASEAN-4 and Japan–ASEAN-4. Autoregressive Regressive Distributed Lag (ARDL) Bounds test was used for the first and third objective while the second objective used Panel ARDL technique for dataset from 1970 to 2015. Three main findings were extracted from the analysis. Firstly, the findings based on the first objective showed a positive impacts of final demand fluctuation on import of intermediates. Second objective analysis reveals that compared to the domestic price, import price was less significant in determining demand of intermediates import. Moreover, ERPT suggests that firms in ASEAN-4 tend to absorb the fluctuation in import prices and maintain domestic price stability. The findings from third objective indicates trade in intermediates is significant in influencing business cycle co-movement between downstream suppliers and upstream suppliers. The empirical results imply that a growing ASEAN-4 is likely to create more demand for intermediates within the region and thus policy that drive trade integration in the region is expected to benefit all. Moreover, import price is less significant in determining imports, thus implying competition on non-price factor in between domestic intermediates and imported intermediates. The result also reveals that more trade in intermediates will cause business cycle co-movement. Therefore, countries should formulate appropriate international trade policy by carefully evaluating the cost and benefits of value chain participation at the regional level.
format Thesis
author Siow, Hui Sian
author_facet Siow, Hui Sian
author_sort Siow, Hui Sian
title Intermediate trade in global value chains and its role in final demand, price and business cycle co-movement
title_short Intermediate trade in global value chains and its role in final demand, price and business cycle co-movement
title_full Intermediate trade in global value chains and its role in final demand, price and business cycle co-movement
title_fullStr Intermediate trade in global value chains and its role in final demand, price and business cycle co-movement
title_full_unstemmed Intermediate trade in global value chains and its role in final demand, price and business cycle co-movement
title_sort intermediate trade in global value chains and its role in final demand, price and business cycle co-movement
publishDate 2021
url http://psasir.upm.edu.my/id/eprint/105509/1/SPE%202022%2021%20UPM%20IR.pdf
http://psasir.upm.edu.my/id/eprint/105509/
_version_ 1792154529086570496
score 13.211869

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