Fragmentation and parts and components trade: Comparison between East Asia and Europe
Fukunari Kimura∗, Yuya Takahashi , Kazunobu Hayakawa
North American Journal of Economics and Finance 18 (2007) 23–40

This paper argues that fragmentation theory is well suited for explaining the mechanics of international
production/distribution networks in East Asia, in contrast with the traditional horizontal product differentiation
model fitted for intra-industry trade in core Europe. Using finely disaggregated international trade data,
patterns of international trade in East Asia and Europe, particularly trade in machinery parts and components,
are carefully examined, and the gravity equation approach is applied to check the validity of the theoretical
framework.