Abstract The flying geese (FG) hypothesis, which asserts the sequential catching-up processes of the latecomers, holds well in the past. Yet a simultaneous boom within the electronics industry across East Asia casts doubt on the applicability of the hypothesis. By using the RCA and NET indices, the paper finds that the FG pattern shows in the electronics industry as a whole, but not always so at the disaggregated level. This suggests that the FG formation may not appear in other industries, if they are involved in international production fragmentation or have differentiated products, and if certain latecomers have become new leaders.
Although Malaysia has been an integral part of the international production fragmentation network since 1970, empirical investigations on the factors that determine the expansion of these networks are sparse. The paper examines the aforementioned empirical gap in the case of the Malaysian information, communications and telecommunications (ICT) sector using trade patterns in parts and components (PNC). Panel-data estimation from 1990 to 2008 suggests that mobile factors such as relative labor costs and productivity, foreign capital, agglomeration effect, infrastructure development and industrial policies are important in facilitating the international production fragmentation development. Income and domestic prices effect however, are conditional to trade flows.
International Production Fragmentation: Approaches to Measuring