Supply chain trade and technological transfer in the ASEANÂ +Â 3 region

This paper analyses how economic integration and the international division of labour have evolved among the ASEAN + 3 countries in the last 20 years. The paper proposes an indicator of the level of technological sophistication based on revealed comparative advantages and uses it to investigate the relation between technological advance, factor endowments and supply chain trade. It is shown that supply chain-trade does not facilitate technological transfer. On the contrary: FDI appears to have significant and negative spill-over effects on technological change. Positive spill-overs from FDI materialize only when host countries have sufficiently high levels of education.