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Ripple effects in regional value chains: Evidence from an episode of the US–China trade war

Year: 2023

Type: article

Abstract: This study empirically examines the ripple effect of demand shocks on upstream suppliers in regional value chains. Specifically, we investigate how changes in US imports from China alter China's imports of intermediate inputs in machinery industries from Japan, South Korea and Taiwan. The analysis of China's monthly imports from the three supplier economies during 2018–2019 finds that the decrease in China's output exports to the US caused by the Trump tariffs reduced China's input imports from supplier economies. Also, this adverse ripple effect was the most significant in Taiwan, where multinational enterprises use China as an export platform.

Source: World Economy

DOI: 10.1111/twec.13444

Authors: Kazunobu Hayakawa, Ju Hyun Pyun, Nobuaki Yamashita, Chih‐hai Yang

Institutions: Korea University, Aoyama Gakuin University, Swinburne University of Technology, National Central University

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: bronze

Funders: National Research Foundation, Ministry of Education, National Research Foundation of Korea, Japan Society for the Promotion of Science