Matthias Helble and Boon-Loong Ngiang authored the article to be reviewed. It is titled “Japan and the World Economy” being contextually pivoted on the relationship between Japan and other Asian countries concerning trade in the global market. The paper is designed to address various issues about the foundations of export and import trade. Specifically, it primarily seeks to highlight the origin of trade in terms of pattern and composition. Similarly, the article aims to delve into the question of how the geographical division is of importance to the East Asian countries in channeling their trade goods to the world market. Additionally, use of tools and regression models of economic background and methodology examine the consequential implications of the patterns of trade to the Country of Japan and East Asia at large.
Based on the analysis of the research, the export trade in the global market is divided into four distinct categories for clarity and understanding. The categorization includes the primary, secondary, capital, and the consumption of goods. The typological grouping of the Asian countries has as well been undertaken to classify them into three broad categories. The classification is based on the regional production networks and comparative advantage. The sample for the data is gathered from the UN database. From the comparative studies on the three tables, there is higher export trade by Japan and Republic of Korea. The study has also found that Japan’s role in the supply of intermediate is deteriorating in the past years; the capital goods’ base is on the rise in the developing countries of Asian origin. However, Japan’s contribution is of less significance.
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The research findings have elaborated the demand for consumption goods in East Asia, Japan together with South Korea; have divested their production and export orientation to meet the need. Based on the trade distance analysis, it is critical in this topic for its role in the flow of international commodities and new market search. According to the findings, it is noted the distance covered in the trade differs in relation to the classified goods, with primary and intermediate products taking the shortest distance, while consumption and capital goods are covering the most extended destination. The methodology of the log regression model used the data or the export and import to study the trade flows. Similarly, the income per capita and population figures have been included to understand the influence of labor and capital factors. The regression findings are crucial in highlighting the fundamental role of the distance covered on the trade flow, pattern, and quantity availability in the global market.
From personal study and review of the article, it is clear that the authors have offered a comprehensive insight into the role Japan plays in the international market in relation to the other world economies. The period chosen is extended enough to enable solid understanding and interpretation of changes that may occur during the structural reorganization in the trade patterns and the shift in demand for the goods. On the same note, the classification of East Asian into four regions is another vital area in analyzing data and comparative study of trade outcome. However, it might be a source of error due to the assumption that regional classification is based on the similarity in networks, patterns, and local production factors (Helble & Ngiang, 2014).
The model used in the distance measurement approach is one of the most imperative tools in creating simplicity in the analysis and interpretation of the role of distance in influencing trade outcome. Contrarily, it is significant to note that the inclusion of dummy variables in the regression modeling would lead to lead to different results that do not depict the reality regarding the subject under study. The categories of goods and even the geographical classification disregard the fact that various products have heterogeneity in characteristics, which may lead to unpredictable results.
- Helble, M., & Ngiang, B. L. (2014). From global factory to global mall: East Asia’s changing trade composition.
