Abstract
The renewed interest in international trade has drawn attention to the phenomenon of vertical specialization, the use of imported inputs for producing goods that are exported (see Bruelhart and Hine, 1999). Balassa (1967, p.97) coined the term, vertical specialization; in a recent paper, Hummels et al, (1998) introduced and discussed the following definition of vertical specialization:
(1) a good must be produced in multiple sequential stages, (2) two or more countries must specialize in producing some, but not all, stages, and (3) at least one stage must cross an international border more then once… Thus, countries link sequentially to produce a final good.
An earlier, abbreviated version of this chapter appeared as Sonis et al., 2000.
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Sonis, M., Hewings, G.J.D., Okuyama, Y. (2002). Vertical Specialization and Interregional Trade: Hierarchy of Spatial Production Cycles and Feedback Loop Analysis in the Midwest Economy. In: Hewings, G.J.D., Sonis, M., Boyce, D. (eds) Trade, Networks and Hierarchies. Advances in Spatial Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-04786-6_19
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