Using comprehensive trade transaction and firm-level data from 2015 to 2023, we examine how Australian firms adjusted import patterns following the US-China trade war. Our method compares firms with high versus low exposure to products subject to Trump tariffs in 2018-2019, measured by their pre-war import patterns. We find that highly exposed Australian firms increased their import dependency on Chinese goods in subsequent years. This suggests the US-China trade war paradoxically reinforced rather than reduced Australia's reliance on Chinese imports, contrary to the expectations of supply chain diversification amid deteriorating geopolitics. A trade war unleashed by the Trump administration, intended, in part, to diminish China's global trade position and encourage US allies to diversify their economic relationships away from China, may have had the paradoxical and unintentional effect of deepening Australia's reliance on Chinese imports.

It is well documented that firms that participate in global value chains (GVCs) are larger and more productive, maintaining higher profitability compared to those without such connections. This paper asks the novel question of whether higher profits being connected to GVCs are shared with employees in the form of better pay. We investigated this rent sharing, using a matched employer-employee dataset of Vietnamese small firms surveyed between 2011 and 2015. There is no evidence for the presence of rent sharing in GVC-participating firms. We take this as evidence that GVC firms provide both higher wages and insurance against wage shocks.

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.

The foetal origins hypothesis postulates that shocks while in utero can have long-term detrimental effects on the health and human capital formation of children. Using data from the Young Lives project for Vietnam, we examine the effects of exposure to historically abnormal rainfall among children in utero on the cognitive development of the same children from 5 to 15 years of age. Based on data on month and place of birth, we show that positive rainfall shocks are associated with better cognitive development in children up to 8 years of age. The effect is more pronounced when positive shocks occur in the early stage of gestation. However, such positive effects are not sustained: the impacts of positive rainfall shocks on cognition are completely absent at 10 and 15 years of age. We contribute to the literature by examining the importance of the timing and persistence of weather shocks during pregnancy on cognitive development by tracking the same children from in utero to school age.

This article examines the long‐term health effects of Agent Orange, a military herbicide containing the hazardous chemical compound dioxin that was widely disseminated in South Vietnam during the Vietnam War (1959–1975). Based on data from US military archives on the herbicide operations, we estimate the prevalence of disabilities among Vietnamese people using the 2009 Population Census. The results demonstrate that the legacy of Agent Orange continues, with ongoing adverse (although small) effects on health even more than 30 years since the end of the war. Critically, the health burden of severe mobility disability has been mostly borne by ethnic minority women in the affected areas.

By comparing the cross-country citation performance of patents registered in the United States Patent and Trademark Office (USPTO), this paper investigates how the economic crisis that Japan faced in the early 1990s altered the innovation capacity of the nation once regarded as a technological powerhouse. The following main findings are reported based on a difference-in-differences framework. First, overall, Japan performed poorly in terms of citations received for its patents compared to control patents in the post-crisis period. This corroborates with the common finding that Japan suffered a marked decline in research performance compared to international standards in the 1990s and 2000s. Second, the crisis exerted prolonged adverse effects on the citation performance of Japanese patents, even 10 years after the crisis. In particular, it caused a permanent drop in non–US citations of Japanese patents. This reduction in citations offset the superior performance of Japanese patents in the pre-crisis period.

This paper assesses how the current COVID-19 pandemic is shaping global value chains in East Asia after the formidable disruptions inflicted by the health crisis. Some have expressed the view that global value chains would readjust and production processes would move home, i.e. reshoring, facilitated by the recent movement of protectionism measures in the post-pandemic world. We evaluate such concerns and examine the role of policy with a focus on non-tariff measures in East Asia.

This paper examines the long-term health effects of Agent Orange—the military herbicide containing the hazardous chemical compound dioxin—which was widely disseminated in South Vietnam during the Vietnam War (1959–1975). Based on data from the US military archives on the herbicide operations, we estimate the prevalence of disabilities among Vietnamese people using the 2009 Population Census. The results demonstrate that the legacy of Agent Orange continues, with ongoing adverse (although small) effects on health even over 30 years since the end of the war. Critically, the health burden of severe mobility disability has been mostly born by women of ethnic minorities in the affected areas.

We examine the impact of exposure to plentiful rainfall while in utero on the cognitive development of the same children from ages 5 to 15 from the Young Lives Project in Viet Nam. Using variations in the month and place of birth, we show that positive income shocks, proxied by above-average rainfall, are associated with better cognitive development up to age 8. The effect is more pronounced when positive shocks occurr early in gestation. However, we find that such positive effects are not sustained in the longer term and are completely absent at ages 10, 12, and 15. Our results call for effective and early policy interventions providing a sustained pathway for the cognitive development of children in weather disaster-prone regions.

This paper examines a largely unexplored channel of the effects of offshore production on onshore (domestic) innovation performance. We combine a comprehensive dataset mapping the global operations of Japanese multinational firms with patent statistics to measure innovation. The study finds that increased offshore production have little effects on onshore innovation performance once properly correcting a simultaneity bias. Furthermore, we find some weak evidence of increased offshore production downgrades the quality of innovation, measured by citations. Consistent with other studies, we find that an increase in overseas R&D is the main driver of innovation creation for multinational firms.

This paper examines innovation response of a panel of Japanese firms to the intensified import competition from China for the period 1994-2009. We build a comprehensive firm-level dataset linking innovation activities including patenting and research and development (R&D) merged to cross-industry measures of Chinese import competition. Carefully accounting for a simultaneity bias between innovation and importing and the possible heterogeneous effects across firms, it is found that firms filed for more patents in response to increased import competition from China. However, this effect is only evident for a group of globally engaged firms. At the same time, Chinese import competition has adversely affected the quality of innovation as measured by citations. Overall, firms with a more domestic market focus are the ones who have felt most of the Chinese import competition, which is also reflected in their declined R&D efforts.

This paper empirically examines the “defensive innovation” hypothesis that firms with higher exposure to low-wage economy import competition intensively undertake more innovative activity by using a high quality Japanese firm-level panel dataset over the period 1994–2005. The novel feature of the analysis is the relation of firm-level variations of patent usage to import competition. The results suggest that intensified import competition from the People’s Republic of China has resulted in greater innovative activity by Japanese firms, consistent with the findings of European firms in Bloom et al. (2016). Moreover, such competition has also led to an increase in non-used patents.

We examine the hypothesis that manufacturing industries in Japan that have been exposed to import competition from the People’s Republic of China (PRC) experience greater skill upgrading (increased demand for skilled workers). Using an industry panel dataset over the period 1980–2010, we exploit variations of worker skill categories by occupation, paired with detailed information and communication technology investment data in the employment share regression. We find that while the PRC’s comparative advantages in exports have shifted from labor-intensive to more capital-intensive products, this has not resulted in substituting skilled workers in Japanese manufacturing. Rather, it has had the profound positive effect of raising overall demand for skilled workers. Most of the competition effects were felt among production workers, leaving middle-skilled workers largely unaffected.

This paper empirically examines the defensive innovation hypothesis that firms which have been more exposed to low wage country import competition intensively undertake more innovative activity, using the high quality Japanese firm-level panel dataset over the period 1994-2005. The novel feature of the analysis is to relate firm-level variations of the patent usage to import competition. The preliminary results suggest that intensified import competition from China has resulted in more innovative activity of Japanese firms, consistent with the finding of European firms in Bloom et al. (2015). Moreover, such competition has also led to both an increase in patents that are used as well as non-used. This finding remains robust to instrumenting Chinese import competitions, the inclusion of other firm-level controls, and measures of import competition from other high and middle income countries. * Senior Lecture in Economics, RMIT in Melbourne, Australia and Visiting Associate Professor at Keio University, Tokyo, Japan nobu.yamashita@rmit.edu.au

This paper examines the agglomeration effects of multinational firms on the location decisions of first-time Japanese manufacturing investors in China for the period 1995–2007. This is accomplished by exploiting newly constructed measures of inter-firm backward and forward linkages formed in a home country. The conditional and mixed logit estimates reveal that agglomeration by first-tier suppliers and customers draws subsequent investment into a location. However, such agglomeration effects are not pervasive and do not extend to the second and third tiers. Instead, we find that agglomeration by third-tier suppliers generates a countervailing force, making a location relatively unattractive.

This paper examines how changes in the Chinese real exchange rate affect China's exports in the context of global production networks. It highlights the misspecification inherent in conventional export models and the importance of distinguishing between the very different impacts of exchange rate changes relative to export destinations and those relative to sources of parts and components. Our empirical estimates cast further doubts on the effectiveness of Chinese exchange rate adjustments for reducing Chinese export volumes.

Asian-Pacific Economic LiteratureVolume 26, Issue 2 p. 176-177 Book Review Harnessing Production Networks: Impact and Policy Implications from Thailand's Manufacturing Industries – By Aekapol Chongvilaivan Nobuaki Yamashita, Nobuaki Yamashita La Trobe UniversitySearch for more papers by this author Nobuaki Yamashita, Nobuaki Yamashita La Trobe UniversitySearch for more papers by this author First published: 21 November 2012 https://doi.org/10.1111/j.1467-8411.2012.01359.xRead the full textAboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onEmailFacebookTwitterLinkedInRedditWechat No abstract is available for this article. References Athukorala, P. and Yamashita, N., 2006. ‘Production fragmentation and trade integration: East Asia in global context’, North American Journal of Economics and Finance, 17(3): 233–56. 10.1016/j.najef.2006.07.002 Google Scholar Kohpaiboon, A., 2009. Global integration of Thai automotive industry, Working Paper No. 16, Thammasat University, Bangkok. Google Scholar Yamashita, N., 2010. International Fragmentation of Production: the impact of outsourcing on the Japanese economy, Edward Elgar, Cheltenham. 10.4337/9781849807234 Google Scholar Volume26, Issue2November 2012Pages 176-177 ReferencesRelatedInformation