Ari Van Assche

HIV infection does not disproportionately affect the poorer in sub-Saharan Africa.

Background:Wealthier populations do better than poorer ones on most measures of health status, including nutrition, morbidity and mortality, and healthcare utilization. Objectives:This study examines the association between household wealth status and HIV serostatus to identify what characteristics and behaviours are associated with HIV infection, and the role of confounding factors such as place of residence and other risk factors. Methods:Data are from eight national surveys in sub-Saharan Africa (Kenya, Ghana, Burkina Faso, Cameroon, Tanzania, Lesotho, Malawi, and Uganda) conducted during 2003–2005. Dried blood spot samples were collected and tested for HIV, following internationally accepted ethical standards and laboratory procedures. The association between household wealth (measured by an index based on household ownership of durable assets and other amenities) and HIV serostatus is examined using both descriptive and multivariate statistical methods. Results:In all eight countries, adults in the wealthiest quintiles have a higher prevalence of HIV than those in the poorer quintiles. Prevalence increases monotonically with wealth in most cases. Similarly for cohabiting couples, the likelihood that one or both partners is HIV infected increases with wealth. The positive association between wealth and HIV prevalence is only partly explained by an association of wealth with other underlying factors, such as place of residence and education, and by differences in sexual behaviour, such as multiple sex partners, condom use, and male circumcision. Conclusion:In sub-Saharan Africa, HIV prevalence does not exhibit the same pattern of association with poverty as most other diseases. HIV programmes should also focus on the wealthier segments of the population.

Electronics Production Upgrading: Is China Exceptional?

In this article, we make use of a unique world electronics production dataset to assess Chinas upgrading trajectory in the global electronics industry. Contrary to existing trade studies, we find no evidence that Chinas electronics production activities are more sophisticated than one would expect from its level of development. We also find little evidence that China is rapidly upgrading into more sophisticated production activities.

Fragmentation and East Asia's Information Technology Trade

This article studies the growth and determinants of information technology (IT) trade in the Asia-Pacific region. We argue that the rise of IT trade must be understood within the context of increasing vertical fragmentation of production processes that has occurred over the past two decades. To evaluate this empirically, we estimate a set of pooled bilateral IT export equations for eight Asian countries, the USA and the EU, where foreign direct investment (FDI) inflows are introduced as a proxy for fragmentation. We apply a panel cointegration approach that allows for heterogeneity in short-run dynamics and in fixed effects. Consistent with production fragmentation, we find that the evolution of IT trade can be explained in part by traditional income and relative price effects but also by FDI inflows.

The Role of Trade Costs in Global Production Networks: Evidence from China's Processing Trade Regime

In a seminal contribution, Yi (2003) has shown that vertically specialized trade should be more sensitive to changes in trade costs than regular trade. Yet empirical evidence of this remains remarkably scant. This paper uses data from Chinas processing trade regime to analyze the role of trade costs on trade within global production networks (GPNs). Under this regime, firms are granted duty exemptions on imported inputs as long as they are used solely for export purposes. As a result, the data provide information on trade between three sequential nodes of a global supply chain: the location of input production, the location of processing (in China) and the location of further consumption. This makes it possible to examine the role of both trade costs related to the import of inputs (upstream trade costs) and trade costs related to the export of final goods (downstream trade costs) on intra-GPN trade. The authors show that intra-GPN trade differs from regular trade in that it not only depends on downstream trade costs, but also on upstream trade costs and the interaction of both. Moreover, intra-GPN trade is more sensitive to oil price movements and business cycle movements than regular trade. Finally, the paper analyzes three channels through which intra-GPN trade have amplified the trade collapse during the recent Global Recession.

China's International Competitiveness: Reassessing the Evidence

In this paper we argue that export data are an inadequate tool to measure a countrys international competitiveness when external trade is dominated by export-processing trade. Export data do not necessarily reflect the value produced in an exporting country, but rather capture the gross value of the products that leave a countrys ports. We demonstrate that, in the case of China, this leads to an upward bias in both the perceived quantitative and qualitative threats to the Western economies.

China's Role in Global Production Networks

Vertical specialization is one of the most notable trends in the international organization of production (Hummels, Jun and Yi, 2001; Yi, 2003; Desai, 2009). Thanks to reductions in communication, transportation and other trade costs, multinational firms are slicing up their value chains and are dispersing their production activities across multiple countries. This means that a single final good is often worked on in many countries, with each sequential node in the value chain performed in the location that is most advantageous for the process.China has been a large beneficiary of this vertical specialization process, with multinational firms integrating the country into their global production networks by offshoring labor-intensive final assembly activities to the country (Branstetter and Lardy, 2006; Amiti and Freund, 2008). However, at least a few questions about China’s role in these global production networks are left unanswered. First, in which type of industries is China integrated into global production networks? The answer to this question will be important to understand the driving forces behind the rapid technological upgrading trajectory of China’s exports. Second, what factors have driven multinational firms to offshore assembly activities to China? Existing studies generally attribute this to the country’s relatively low labor costs and its favorable export promotion policies. But, as we will discuss below, China’s heavy reliance on imported inputs for its assembly activities suggests that its geographic location may also have played an important role. Finally, how important is Canada as a supplier to these global production networks?

Global Production Networks in Electronics and Intra-Asian Trade

The growth of East Asia’s intra-regional trade is driven largely by increased component trade within global electronics production networks. Data on both electronics trade and production elucidate a pattern of specialization in which upper- and middle-income countries produce sophisticated components and lower-income countries assemble lower- value-added final goods. There is evidence of increasing sophistication within the electronics sector by the Newly Industrialized Economies and to a lesser extent by ASEAN countries. Despite the marked increase in intra-regional trade, developing East Asian countries remain heavily dependent on developed-country markets. When Western export demand rapidly contracted during the 2008-2009 economic crisis, these specialization patterns led the rapid diffusion of the business cycle shock throughout the East Asian region.

Vertical Specialization, Tariff Shirking and Trade

The core idea behind the paper is that trade policy matters for the organization of global value chains, a notion largely neglected by economists but which has important implications for our understanding of trade and the international transmission of trade policy shocks. We develop a theoretical model in which a firm’s ability to spatially separate manufacturing from headquarter services gives them the flexibility to circumvent economy-specific tariff changes by switching their assembly location abroad. We show that tariff shirking increases the elasticity of bilateral trade to economy-specific tariff hikes due to an extra extensive margin effect. Furthermore, we show that tariff shirking affects the vulnerability of headquarter services and manufacturing to trade policy shocks in opposite ways. While tariff shirking dampens the vulnerability of headquarter services to trade policy shocks, it amplifies the vulnerability of manufacturing to trade policy shocks. Using firm-level and province-level export data from the People’s Republic of China, we provide evidence in line with the theoretical model.

Spatial Linkages and Export Processing Location in China

This paper provides empirical evidence that spatial linkages matter for the localisation of global value chain activities. Relying on processing trade data for Chinese provinces during the period 1997–2008, we investigate whether a Chinese provinces proximity to international suppliers and international buyers within an industry chain affects its attractiveness as an export processing location. We find that the upstream and downstream spatial linkages both have a strong and independent explanatory power. We also explore what factors explain the influence of these spatial linkages.

Is Our World Going to Get a Whole Lot Smaller

The surge of oil prices in recent years has led to speculation that rising transportation costs could end the period of dramatic world trade growth in the words of Rubin (2009), Your world is going to get a whole lot smaller. Using data from Chinas Customs Statistics, we examine the impact of oil prices on trades sensitivity to distance. We find that higher oil prices increase trades elasticity to distance, but that the economic effect is small. We also find that the effect is more pronounced for trade within global production networks, and less large for goods shipped by air.