A Expansion Hammels's Virtical Specialization Share for Measuring Fragmentation Using Multi-national I-O Table

The last several decades have observed a rapidly increasing integration of global economy and growing shares of intermediate goods in international trade flows. International trade affects production activities and changes their patterns. Jones and Kierzkowski(1990) have noted that increasing returns and specialization encourage a growing firm to switch to a production process with fragmented production blocks connected by service links and such fragmentation spills over to international markets. Production processes is disintegrated and split into different location but that lead to the same final product. Many trade economists believe this is to be the reason of increasing the trade of intermediate goods. This phenomenon has been studied by many and given different labels in every aspect, for example outsourcing, vertical specialization, fragmentation of production and so on. It seems to be no single measure for those activities aspects. An interesting measure has proposed by Hummelsa et al. (2001). Their index, vertical specialization share (VS), can be observed quantitatively the amount of vertical specialization for a country that uses imported inputs to produce exported goods. The availability of data provided by the OECD's Input-Output tables. But, though the input was intermediary goods, output couldn't separate intermediary goods in this method. In this paper, I introduce the expansion of VS using the Asian International Input-Output table and calculate VS of the export intermediatery goods which they didn't present