This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. Journal of Economic Perspectives
  4. Spring 2012
  5. The Rise of Middle Kingdoms: Emerging Economies in Global Trade

Journal of Economic Perspectives

ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)

The Rise of Middle Kingdoms: Emerging Economies in Global Trade

  • Gordon H. Hanson
Journal of Economic Perspectives
vol. 26, no. 2, Spring 2012
(pp. 41–64)
Download Full Text PDF
(Complimentary)

Abstract

In this paper, I examine changes in international trade associated with the integration of low- and middle-income countries into the global economy. Led by China and India, the share of developing economies in global exports more than doubled between 1994 and 2008. One feature of new trade patterns is greater South-South trade. China and India have booming demand for imported raw materials, which they use to build cities and factories. Industrialization throughout the South has deepened global production networks, contributing to greater trade in intermediate inputs. A second feature of new trade patterns is the return of comparative advantage as a driver of global commerce. Growth in low- and middle-income nations makes specialization according to comparative advantage more important for the global composition of trade, as North-South and South-South commerce overtakes North-North flows. China's export specialization evolves rapidly over time, revealing a capacity to speed up product ladders. Most developing countries hyper-specialize in a handful of export products. The emergence of low- and middle-income countries in trade reveals significant gaps in knowledge about the deep empirical determinants of export specialization, the dynamics of specialization patterns, and why South-South and North-North trade differ.

Citation

Hanson, Gordon H. 2012. "The Rise of Middle Kingdoms: Emerging Economies in Global Trade." Journal of Economic Perspectives, 26 (2): 41–64. DOI: 10.1257/jep.26.2.41

JEL Classification

  • F14 Country and Industry Studies of Trade
  • O19 International Linkages to Development; Role of International Organizations
  • P33 Socialist Institutions and Their Transitions: International Trade, Finance, Investment, and Aid
  • G01 Financial Crises
There are no comments for this article.
Login to Comment