Fragmentation and trade of machinery parts and components in mekong region

Abstract

© 2015 World Scientific Publishing Company. This paper examines the trade of machinery parts and components between Thailand and the other Mekong countries though gravity model, for the purpose of assessing the existing production networks in Mekong region by applying fragmentation theory. The findings are: First, the evolution of production networks between Thailand and Vietnam was identified in terms of their two-way trade integration. Second, the trade intensity between Thailand and Vietnam was explained by the fragmentation factors, i.e., their gaps in per capita GDP and the relatively lower service-link costs in Vietnam. Third, the trade less-integration of Thailand with Cambodia and Myanmar was explained by their higher service-link costs.