Determinants of Export Performance in East and Southeast Asia

This paper examines patterns and determinants of exports in nine East and Southeast Asian economies, with an emphasis on the increasing important role of parts and components in total exports. To see whether exports in parts and components are "special" and to allow comparisons, export equations are estimated for three different export categories: total merchandise exports, manufacturing exports, and exports of machinery and transport equipment (SITC 7). The analysis covers the period 1990–2006, during which parts and components trade burgeoned. The estimations reveal that the growing importance in the export composition of parts and components within vertically integrated cross-border production processes has tended to weaken the nexus between real exchange rate and export performance. Supply-side factors tend to become more crucial in determining export performance.