The regional economic integrations, bilateral trade agreements (BTAs), and other international strategic alliances have affected countries' dynamic comparative advantages and specialization. Whether there are systematic changes in the comparative advantage and specialization of trade in the East-Asian countries has been a crucial issue for the future development of the East-Asian economic integration. One of the most important issues in the international trade is exchange rate. Purchasing Power Parity (PPP) is a simple empirical preposition that once converted to a common currency; national price levels should be equal. In spite of the relatively large body of literature examining the PPP theory for developed countries, relatively few researches have studied the proposition for developing countries, which have various distinctive international policies and degrees of liberalization such as the East Asian countries. This dissertation has a title: "Shift in Comparative Advantage, Dynamic Market and Purchasing Power Parity in the East Asia". The dissertation aims to examine economic integration, comparative advantages and Purchasing Power Parity (PPP) of the East Asian countries. It consists of 12 chapters. The all ten research questions are answered in the entire ten chapters (Chapter 2-1 1). Chapter 1 is introduction. Chapter 2 discusses the evolution of the Association of Southeast Asian Nations (ASEAN). From the background of establishment and the evolution in organizational structure of the ASEAN, we find that the ASEAN has changed its focus from political to economic interests. Parallel with the proliferation of economic regionalism in the world and the period of active trade liberalization in the 1980s and 1990s, the ASEAN has pushed economic cooperation forward. Chapters 4-7 and 1 1 deal with comparative advantage. In chapter 4, we analyze the shifts in patterns of comparative advantage of the ASEAN5 (Singapore, Indonesia, Malaysia, Thailand and the Philippines) as a single entity, Japan, Korea and China (abbreviated as the ASEAN+3) by applying statistical method. The ASEAN countries have shown the most dynamic change in the pattern of comparative advantage, followed by China, Korea and Japan. This chapter also indicates that comparative advantage must be considered in the dynamic sense instead of static one. This is elaborated further in the following three chapters (5-7) and Chapter 1 1. In chapter 5, we discuss a more theoretical issue on the relationship between a country's factor endowments and its comparative advantage. We find that China, Indonesia and Thailand have comparative advantage in unskilled /aftor-intensive industries, meanwhile only Japan has comparative advantage in technology-intensive industries for the last two decades in East Asia. This chapter also indicates the dynamic specialization and recognition of the Flying Geese (FG) pattern in East Asia, which is minutely examined in Chapters 6 and 7. The dynamic specialization and convergence in trade patterns of the East Asian countries are represented in Chapter 6. The East Asian countries have shown despecialization together with convergence in their patterns of comparative advantage. This indicates the existence of intra-regional trade in the region examined further in Chapter 9. Chapter 7 analyzes the FG pattern in East Asia. We point out that the FG pattern is recognized in the case of the East Asian region. The industries in the first round of the FG pattern are unskilled /a^or-intensive industries, followed by human capital intensive industries in the second round and technology-intensive industries in the third round. Chapter ll shows a case study i.e. structure of protection in Indonesian manufacturing sector. This chapter uses the Indonesian Input-Output (10) tables and data on tariffs to calculate a degree of protection, namely effective rate of protection (ERP) by Balassa (1971). Indonesian industrial and trade policies remind us of the statement of a supporter of trade liberalization; 'good times mean bad policies and bad times mean good policies'. Effective rate of protection (ERP) analysis shows that Indonesian manufacturing sector has become more liberal after the Asian financial crisis. Chapters 3, 8 and 9 are related to the dynamic market of East Asian countries. In Chapter 3, we examine the regional trade in the ASEAN region. In inter-regional trade, there have been shifts in the destinations of the ASEAN countries' exports. Although Japan, the EU and the NAFTA are still dominant trade partners, China (Mainland), Hong Kong and Taiwan have increasingly become important destinations to the ASEAN countries' exports. The intra-regional trade in the ASEAN region has been larger (intense) than expected, given the ASEAN's importance in world trade, excepting Cambodia. Chapter 8 describes the analysis of the East Asian countries' dynamic export market. Constant Market Shares (CMS) method is applied. The constant share norm seems powerful in explaining a country's exports performance since the mid 1980s. The proliferation of regionalism and economic integrations in the beginning of 1990-s caused the change in trade pattern. However, we point out that that the change in trade pattern happened only in the short period (in the beginning of economic integrations) i.e. 1990- 1995 in the case of the EU, the North East Asia and the ASEAN5 and 1995-2001 in the case of the NAFTA. Chapter 9 analyzes the phenomenon of intra- and inter-industry trade in both intra- and inter-regional trade in East Asia. By using a modified intra- and inter-industry trade measures (incorporating intra- and inter-regional trade), we find that intra-regional trade increased significantly in the case of the East Asia and the NAFTA. As the importance of the intra-industry trade increases, the dominance of inter-industry trade decreases in the East Asia. Intra-industry trade in intra-regional trade has larger increases than that in inter-regional trade in the East Asia. In Chapter 10, we examine the PPP hypothesis in the cases of the East Asian countries. The three widely used methods in analyzing PPP i.e. univariate time series of Real Exchange Rate (RER); multivariate regression; and Johansen framework of multivariate cointegration give the same conclusion that the PPP hypothesis does not hold in the strong sense in the case of all selected East Asian countries. In general, the Balassa-Samuelson effect plays significant role in causing deviation away from PPP. Chapter 1 2 represents concluding remarks. Several commonanalytical tools are applied, such as Trade Intensity (TI) index, Revealed Symmetric Comparative Advantage (RSCA), Spearman Rank Correlation, Trade Balance Index (TBI), Econometric model, Constant Market Shares (CMS), Intraregional trade (IRT) and Intra-industry trade (Ha) and Effective Rate of Protection (ERP). However, we have contributed to the empirical analytical tools in international economics and applied them in the dissertation. First, we make a new method in analyzing the long run convergence of comparative advantage between two countries, i.e. by testing the stationarity of Spearman' s rank correlation coefficients between two countries' Revealed Symmetric Comparative Advantage (RSCA) (Chapter 4). Second, we describe the Heckscher-Ohlin (H-O) model in the General Equilibrium framework. We also represent the four common diagrams in one figure to show the clear relationships between production and consumption general equilibriums. Third, we introduce dummy variables (across countries and across industries) in the econometric model, which is commonly applied to examine countries' dynamic specialization (Laursen, 1998; Worz, 2005) (Chapter 6). Fourth, by combining RSCA and Trade Balance Index (TBI), we make a new analytical tool, namely 'products mapping', which is suitable for analyzing the 'flying geese' (FG) pattern (Chapter 7). The FG pattern is one of the well-recognized models to be strongly considered in explaining economic development in East Asia. Kaname Akamatsu firstly introduced the model in the 1930s, as an analogous sequential development or catching-up process of manufacturing industries in developing countries. By applying the new analytical tool, we examine empirically the FG pattern in East Asia. Fifth, we refine the CMS method by Learner and Stern (1970) (Chapter 8). Many researchers have tried to explain factors underlying countries' export performance. Paper by Tyszynski (1951) provides a fundamental analytical tool, which has been famous as Constant Market Shares (CMS). The more comprehensive and applicable version of the CMS is proposed by Learner and Stern (1970). However, the Learner and Stern's version has several shortcomings as noted by Richardson (1971a, 1971b), and Fagerberg and Sollie (1987). In this dissertation, we derive a new version of the Learner and Stern's and applies it to examine the export performance of several regions and countries. Sixth, we modify the formula of inter-industry trade and intra-industry trade by Grubel and Lloyd (1975) to deal with the phenomena of inter-regional trade and intra-regional trade (Chapter 9). This modified formula is referred to as Regional Intra-industry Trade index. Weapply the three analytical tools on PPP; univariate time series, multivariate regression and Johansen cointegration framework (Chapter 1 0). We examine structure of production and calculate the effective rates of protection in Indonesian manufacturing sector (Chapter 11)., Chapter 1 Introduction 1. 1. Background 1.2. Research Questions 1.3. Theoretical Framework and Research Plan Chapter 2 The Evolution ofASEAN 2. 1. Introduction 2.2. A Brief History of the Pre-ASEAN Cooperation 2.3. The ASEAN: from Political to Economic Issues 2.4. The AFTA trough the CEPT Scheme 2.5. Conclusions and Policy Implications Chapter 3 Major Trade Trends in the ASEAN Region 3. 1. Introduction 3.2. Intra-regional Trade in the ASEAN region 3.3. Geographic Destinations of Exports 3.4. Intra-ASEAN Trade: Does the Size of Country matter? 3.5. Dependence upon Intra-regional Trade 3.6. The Intensity of Intra-regional Trade 3.7. The Intensity of Bilateral Trade 3.8. Conclusions Chapter 4 Shift in Pattern of Comparative Advantage 4. 1. Introduction 4.2. Methodology 4.2.1.Data 4.2.2. Revealed Comparative Advantage 4.2.3. Distribution of RSCA 4.2.4. Rank Correlation 4.3. Analysis 4.3. 1. Trends of the overall comparative advantage 4.3.2. Increased comparative advantage with de-specialization 4.3.3. The structure of comparative advantage 4.3.4. Shifts in the pattern of comparative advantage 4.3.5. Relation of the patterns of comparative advantage:substitute or complement? 4.3.6. Convergence in the pattern of comparative advantage 4.4. Conclusions and Policy Implications Chapter 5 Factor Endowments and Comparative Advantage 5. 1. Introduction 5.2. The H-0 model in the General Equilibrium Framework 5.3. Violations of the H-0 Assumptions: Numerical Examples 5.3.1. Case 1 : where all assumptions are fulfilled 5.3.2. Case 2: where utility functions are different 5.3.2. Case 3: where production functions are different 5.4. Comparative Advantage of East Asian Countries 5.4.1.Data 5.4.2. Measurement of comparative advantage 5.4.3. Definition of industry 5.4.4. Classification of industries 5.4.5. Results and analysis 5.5. Conclusion and Policy Implications Chapter 6 Dynamic Specialization and Convergence in Trade Pattern 6. 1. Introduction 6.2. Literature Review 6.3. Methodology 6.3.1.Data 6.3.2. Econometric model 6.3.3. Hypothesis testing -Different dynamics in the specialization across countries -Different dynamics in the specialization across industries -Different dynamics in the specialization across industries within country 6.3.4. Estimation 6.3.5. The Spearman's rank correlation 6.4. Results and Analysis 6.4. 1. Dynamic specialization across countries 6.4.2. Dynamic specialization across industries 6.4.3. Dynamic specialization across industries within country 6.4.4. Convergence in the trade pattern 6.5. Conclusions and Policy Implications Chapter 7 Flying Geese and "Products Mapping" 7. 1. Introduction 7.2. The FG Paradigm: Literature Review 7.2. 1. The Akamatsu's original model offlying geese 7.2.2. The modern "multi-sequentialist" concept 7.2.3. Previous empirical tests 7.3. Methodology 7.3. 1. Data and industries classification 7.3.2. "Products Mapping": RSCA and TBI 7.4. Results and Analysis 7.4.1. "Products mapping" 7.4.2. The Flying Geese pattern 7.4.2.1. The rounds of industries in the FG pattern 7.4.2.2. Potential industries transmitted from Japan to the follower-geese 7.4.2.3. The third round: the FG paradigm might be less significant 7.5. Conclusions and Policy Implications Chapter 8 Export Performance: Constant Market Shares Analysis 8. 1. Introduction 8.2. Trends in Exports 8.3. The Constant Market Shares (CMS) 8.3.1. The constant share norm 8.3.2. The levels of analysis 8.3.3. The shortcomings of Learner and Stern's version 8.3.4. Changes in the share of exports: Fagerberg and Sollie's Version -The ' several commodities-one market' case -The ' several commodities-several markets' case 8.3.5. Two different points of view: a new version ofCMS 8.4. Empirical Results and Analysis 8.5. Conclusions and Policy Implications Chapter 9 Intra-Regional and Intra-Industry Trade 9. 1. Introduction 9.2. Methodology 9.2.1.Data 9.2.2. Trade by industry and trade by region 9.2.3. The measurement of intra- and inter-industry trade 9.2.4. Adjustment of FOB or CIF 9.2.5. The aggregation 9.3. Trends in the Intra- and Inter-regional Trade 9.4. Trends in the Intra- and Inter-industry Trade 9.5. Policy Implications 9.6. Concluding Remarks Chapter 10 Purchasing Power Parity Adjusted Non-Traded Goods 10.1. Introduction 1 0.2. Literature Review 10.2.1. Types ofPPP 1 0.2.2. Empirical techniques 1 0.2.3. Previous findings by several researcher 1 0.2.4. PPP and non-traded goods: Balassa-Samuelson effect 10.3. Methodology 10.3.1. Data 1 0.3.2. Estimation 1 0.4. Empirical Results and Analysis 10.4. 1. Stationery test 1 0.4.2. Univariate time series analysis 1 0.4.3. Multivariate analysis: Least Squares 1 0.4.4. Multivariate analysis: ARCH 1 0.4.5. Long-term equilibrium 10.5. Policy Implications 1 0.6. Concluding Remarks Chapter ll Structure of Protection in Manufacturing Sector: Indonesian Case Study 1 1. 1. Introduction 1 1.2. Evolution of Industrial and Trade Policies 1 1.3. Trends in Comparative Advantage 1 1.4. Methodology 1 1.4. 1. Effective rate of protection ll.4.2. Data Input-Output table Tariff 1 1.5. Result and Analysis 1 1.5. 1. Effective rate of protection (ERP) 1 1.5.2. Some comparisons across countries 1 1.6. Concluding remarks Chapter 12 Concluding Remarks References Supplements to Chapters 4 and 6 Appendixes A.4. 1. Revealed Comparative Advantage (RCA) A.4.2. Revealed Symmetric Comparative Advantage (RSCA) A.4.3. Distribution ofRSCA A.4.4. Spearman's Rank Correlation across Times A.4.5. Spearman's Rank Correlation across Countries A.5. 1. Calculation Results A.5.2. Classification of Products by Factor Intensity A.6. 1. Estimation Results: across Countries A.6.2. Estimation Results: across Products A.6.3. Spearman's Rank Correlation of Comparative Advantage by Products between Japan and the other East Asian Countries A.7. 1. Trade Balance Index (TBI) A.I2. Products Mapping A.9. Regional Inter- and Intra-Industry Trade Index A.10. Estimation Results on PPP, Doctoral Program, Graduate School of Economics 平成21年3月18日授与, 甲第6号