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Globalisation and Fragmentation: Evidence from the Electronics Industry in Ireland

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Abstract

This paper examines fragmentation and globalisation in the context of the electronics industry in Ireland. Fragmentation refers to the breaking-up of vertically integrated production processes into various components. We find empirical evidence of fragmentation in a number of data sources. Data on inward processing trade indicate that production in the Irish electronics industry is globally fragmented, and that the scale of such fragmented production is growing. Furthermore, Ireland's share of fragmentation is rising faster than that in the EU generally, especially in the electronics industry. Other firm survey data show that the scale of local fragmentation has risen relative to global fragmentation as firms in different Irish intermediate goods producing sectors trade increasingly on the local Irish market. Looking more specifically at the computer manufacturing sector, we find evidence of fragmented production in this sector in that the ratio of bought-in materials to total sales has risen significantly over the past decade.

Suggested Citation

  • G rg, H & Ruane, F, 1999. "Globalisation and Fragmentation: Evidence from the Electronics Industry in Ireland," Trinity Economics Papers 9911, Trinity College Dublin, Department of Economics.
    • Handle: RePEc:tcd:tcduee:9911
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    File URL: http://www.tcd.ie/Economics/TEP/1999_papers/TEPNo11HG99.pdf
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    References listed on IDEAS

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    1. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 857-880.
    2. Markusen, James R. & Venables, Anthony J., 1999. "Foreign direct investment as a catalyst for industrial development," European Economic Review, Elsevier, vol. 43(2), pages 335-356, February.
    3. Barry, Frank & Bradley, John, 1997. "FDI and Trade: The Irish Host-Country Experience," Economic Journal, Royal Economic Society, vol. 107(445), pages 1798-1811, November.
    4. Paolo Figini & Holger Görg, 1999. "Multinational companies and wage inequality in the host country: The case of Ireland," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 135(4), pages 594-612, December.
    5. Dermot McAleese, 1998. "Global Integration, Factor Mobility and EMU: Implications for the Irish Economy," Economics Policy Papers 981, Trinity College Dublin, Department of Economics.
    6. Barrell,Ray & Pain,Nigel (ed.), 1999. "Innovation, Investment and the Diffusion of Technology in Europe," Cambridge Books, Cambridge University Press, number 9780521620871, January.
    7. repec:hhs:iuiwop:430 is not listed on IDEAS
    8. Holger Görg & Frances Ruane, 1998. "Linkages between Multinationals and Indigenous Firms: Evidence for the Electronics Sector in Ireland," Economics Technical Papers 9813, Trinity College Dublin, Department of Economics.
    9. Jones, Ronald W & Engerman, Stanley L, 1996. "Trade, Technology, and Wages: A Tale of Two Countries," American Economic Review, American Economic Association, vol. 86(2), pages 35-40, May.
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    Cited by:

    1. Séan Ó Riain, 2004. "State, Competition and Industrial Change in Ireland 1991-1999," The Economic and Social Review, Economic and Social Studies, vol. 35(1), pages 27-53.
    2. Prema-chandra Athukorala, 2005. "Product Fragmentation and Trade Patterns in East Asia," Asian Economic Papers, MIT Press, vol. 4(3), pages 1-27, Fall.
    3. Gorg, Holger & Hanley, Aoife, 2005. "Labour demand effects of international outsourcing: Evidence from plant-level data," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 365-376.
    4. Gorg, Holger & Hanley, Aoife, 2005. "International outsourcing and productivity: evidence from the Irish electronics industry," The North American Journal of Economics and Finance, Elsevier, vol. 16(2), pages 255-269, August.
    5. Holger Görg & Aoife Hanley, 2004. "Does Outsourcing Increase Profitability?," The Economic and Social Review, Economic and Social Studies, vol. 35(3), pages 267-288.
    6. Holger Görg, 2000. "Fragmentation and trade: US inward processing trade in the EU," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 136(3), pages 403-422, September.
    7. Barry, Frank & Bergin, Adele, 2012. "Offshoring, Inward Investment and Export Performance in Ireland," Papers WP430, Economic and Social Research Institute (ESRI).

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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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