Production Sharing and Comparative Advantage: The Cases of East Asia and Mexico

The industrial structures and strategy of the country, which exports parts and components, seem to have a significant effect on the pattern of production sharing of the country where assembly takes place. In the case of some East Asian countries, the pattern and the competitiveness in the assembly of final products strongly depends on the industrial structure and production sharing strategy of Japan. However, the relationship between Mexico and the United States seems to be completely different in that the pattern of production sharing of the first has little relationship with the export pattern of the second of parts and components. This difference may be explained through the difference between the United States and Japan in terms of the pattern of production sharing. Japan’s production sharing is based on specialization, whereas the production sharing of the United States is based on intra-industrial trade.