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