Unraveling the Complexity of Vertical Specialization and Fragmentation Trade: A Survey of Patterns, Drivers, Implications, and Evolving Dynamics

Abstract

The concept of the “global production network” (GPN) has emerged as a framework for analyzing the intricate connections between a dominant or pivotal firm and its suppliers across various countries. ¹ The expansion of GPNs signifies that trade encompasses not only the final products but also the parts and components (P&C) involved in their production. The reduction of tariff barriers and advancements in transportation and communication technology have facilitated the fragmentation of production processes across different countries. This has led to a significant transformation in the nature and structure of global trade. This chapter aims to synthesize and present this literature. By identifying the key drivers, determinants, and consequences of fragmentation trade through a literature-based approach, this study aids in assessing the opportunities and challenges those lagging countries, like India, encounter in terms of increased participation in GPNs.

Citation

Veeramani, C. (2024), "Unraveling the Complexity of Vertical Specialization and Fragmentation Trade: A Survey of Patterns, Drivers, Implications, and Evolving Dynamics", Bhattacharyya, R. and Mazumdar, D. (Ed.) Contemporary Issues in International Trade, Emerald Publishing Limited, Leeds, pp. 9-36. https://doi.org/10.1108/978-1-83797-320-020241002