Responses to the Crisis:

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Responses to the Crisis:

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dc.contributor.author Ernst, Dieter
dc.date.accessioned 2010-06-30
dc.date.accessioned 2010-06-30T11:23:54Z
dc.date.available 2010-06-30T11:23:54Z
dc.date.issued 2010-06-30
dc.identifier.isbn 87-7873-071-6
dc.identifier.uri http://hdl.handle.net/10398/8091
dc.description.abstract It has been argued that “… trade adjustment in East Asia…will be rapid and sizable, lifting aggregate growth in these economies even as the domestic non-tradable sectors continue to suffer a decline (as in Mexico)” (World Bank, 1998, p.5). Much hope has been pinned on the electronics industry to come through with rapid growth through expanding exports. Two arguments appear to bolster such an expectation: the severity of the region´s currency depreciations has lowered the cost of much of its electronics supply base relative to its competitors; and the electronics industry´s proven track record as an engine of export-led growth shows that it can be quickly started and accelerated in response to changes in the market. However, no export boom in electronics has (as yet) materialized. The paper analyzes what explains this puzzle. We first introduce a taxonomy of East Asia´s electronics firms and market segments to distinguish different capacities to ride out the crisis. We then discuss three barriers to an East Asian export boom in electronics: i) supply-side constraints that result from limited access to trade finance, and from the cost-increasing impact of local currency depreciations in highly import-dependent countries; ii) demand-related constraints, resulting from deteriorating growth perspectives in East Asia´s electronics export markets; and iii) deflationary pricing pressures, resulting from a narrow specialization in high-tech commodities that are characterized by periodic surplus capacity and price wars. Combined, these barriers have produced a vicious circle: once exports increase, net volume gains are likely to be offset by pricing losses. en_US
dc.format.extent 36 s. en_US
dc.language eng en_US
dc.relation.ispartofseries DRUID;99-2
dc.subject.other Crisis; industrial dynamics; specialization; deflation; Asia; electronics industry en_US
dc.title Responses to the Crisis: en_US
dc.type wp en_US
dc.accessionstatus modt10jun30 siso en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Institut for Innovation og Organisationsøkonomi en_US
dc.contributor.departmentshort INO en_US
dc.contributor.departmentuk Department of Innovation and Organizational Economics en_US
dc.contributor.departmentukshort INO en_US
dc.idnumber x644977697 en_US
dc.publisher.city København en_US
dc.publisher.year 1999 en_US
dc.title.subtitle Constraints to a Rapid Trade Adjustment en_US


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