ABSTRACT
This chapter investigates the distribution of domestic value added (DVA) gains between countries in the changing landscape of Factory Asia. The aftermath of the two economic crises have weakened demands from advanced countries, and together with the internal erosion of comparative factor price advantage, the notion of substituting foreign input for domestic inputs embodied in their exports is becoming one of developing nations' policy goals in 'moving up the value chain'. Specifically, thie chapter seeks to identify patterns in DVA in the manufacturing exports from key participants in the Factory Asia model. It examines the DVA content of exports and its technological sophistication over time to identify changes in the trade patterns in key Factory Asia economies. The chapter summarizes the current literature and highlights salient features of the Factory Asia model, followed by the methodology and variables used to measure trade flows and gains in DVA in the chapter.
