Trade in Manufactures between Asian Pacific Rim Countries: Trends and Determinants

Abstract

The paper analyses changes in the regional composition of trade in manufactures between the Asian countries of the Pacific Rim (PACRIM) in the 1965-85 period and applies a gravity model approach in order to sift out determinants of bilateral trade in the Asian Pacific Rim area. Finally, changing degrees of intra-industry specialization in trade between five regional groups in the area are measured and compared. The results suggest Japanese-Chinese trade to be the driving force of intra-PACRIM trade in the early eighties. In the total sample of bilateral trade flows relatively physical capital-intensive goods exported from countries with a large manufacturing capacity and relatively small domestic markets emerge as dominating segments. Intra-industry specialization has increased during the period albeit starting from very different levels in individual countries and groups.