Empirical Analysis of the Hypothesis of Architecture-based Competitive Advantage and International Trade Theory

In this paper, we propose an architecture-based hypothesis of comparative advantage, which predicts that a good “fit” between “organizational capacities of manufacturing” that companies have built up over their histories and product-process architecture (i.e., basic design concepts for product function, structures and processes), tends to result in international competitiveness. Therefore, we attempt an empirical analysis that the net exports of Japan are relatively “Integral type.” Concretely, we make an architecture spectrum indicator by the principal component analysis based on the answers to a corporate questionnaire (33 companies and 254 products) executed in cooperation with the Ministry of Economy, Trade and Industry. We also show the integral degree and the modular degree of each product Next, we performed regression analysis of the export ratio and the architecture spectrum indicator by the assembly-industry products, and by the process-industry products. The result supported the above-mentioned proposition. Moreover, for assembly-industry products a statistically significant result is obtained even by the regression analysis that includes the labor intensity variable. These results show that “The export ratio tended to rise both as the integral architecture indicator increases and as the labor intensity levels rise for the assembly-industry products, where global competitiveness is strong.” These results have the possibility of suggesting a new development direction in international trade theory.