Global Production Network Theory Research Articles

Evaluation of the urban industrial coupling strategy based on the global production networks theory: A case study of the smart phone industry in the Guangdong-Hong Kong-Macao Greater Bay Area.

In the context of uncertain economic environments urban agglomerations play a crucial role in economic development, reshaping industrial chains and fostering inter-city cooperation. This study employs the Global Production Network (GPN) theory to enhance our understanding of how cities integrate into regions, emphasizing the often-overlooked governmental influence in strategic coupling processes. In examining the evolution of China's smartphone industry within the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) this research categorizes 19,599 smartphone companies into five distinct groups. Through analyzing their spatial distribution and geographical linkage the study identifies four strategic coupling modes based on the localization of assets, considering spatial influence and technological complexity along horizontal and vertical dimensions. Structural and institutional elements within these modes are also explored. The research uncovers unique integration patterns among nine cities in the GBA's mobile industry, revealing distinct spatial clusters rooted in technological, resource and innovation factors. Crucially, local policies play a pivotal role. Cities such as Shenzhen and Dongguan emerge as technology hubs, contrasting with Foshan and Zhongshan, which leverage resource advantages. The spatial impact, contingent on specific assets, underscores the necessity for nuanced top-down coupling methods in regional development. Moreover, the study emphasizes the significance of nurturing innovation links, not only between leading companies but also among midstream and downstream enterprises, enhancing cities' strategic coupling capabilities.

Theorising and analysing the forest-based bioeconomy through a global production network lens

There is a multiplicity of bioeconomies and transition pathways, many of which are radically different from the biotechnological approach dominating in Western and Northern Europe. While the empirical basis for understanding this diversity is growing, also in the Global South, there is a lack of bioeconomic learning from existing allied theories. This paper applies global production network theory to the forest-based bioeconomy. Specifically, we focus on internationally traded renewable environmental products and identify an analytical framework for empirical investigation of the forest-based bioeconomy. We then apply the approach to the case of commercial medicinal plants in Nepal, using the example of the trade in air-dried bulbs of the Himalayan herbaceous plant Fritillaria cirrhosa in 2014–14 and 2021–22 with empirical data from structured interviews with traders (n = 65 and n = 79 for the two observation years) supplemented with interviews in the first period with harvesters (n = 540), central wholesalers (n = 73), processing industries (n = 79), and regional wholesalers in India and Tibet (n = 78). We find that global production network theory, and the associated array of analytical devices, can inform empirical investigation of the forest-based bioeconomy by operationalising the bioeconomy concept and grounding findings within an established theoretical frame and its associated emerging body of literature. The empirical application also demonstrated the possible policy outcomes from such empirical analyses.

Research on Global Supply Chain Model of Multinational Corporations Based on Global Production Network Theory--Apple Corporation as an Example

From the 20th century, with the development of manufacturing Industry, the concept of division of labor and globalization had become more and more important, manufacturing companies have formed a global production network based on the division of labor in the product value chain. As a well-known company, Apple has built a global supply chain based on this theoretical foundation, as a result, brought Apple huge commercial profits and increase its proportion in the market share. This paper analyzes how Apple flexibly uses the global production network to reduce its production costs and increase profits, as well as the problems that may appears by using this theory. The analysis show that Apple has become a leading company in the electronic technology industry by maximizing the use of global resources and high-precision production processes and techniques, giving it a discourse power of choosing manufacturers. At the same time, Chinese manufacturers are basically in the middle or lower level of Apple's supply chain, which can be most easily abandoned and replaced.

Relasi Interfirm-Control dalam Konfigurasi Strategi Jejaring Produksi Global pada Industri Teh (Studi Kasus Unilever dan PT. Perkebunan Nusantara VIII)

This reseacrh aims at analyzing the involvement of Indonesia tea industry in the global production network using Dynamic Competitive concept which developed by Global Production Network theory 2.0. It takes Unilever Global as the leadfirm actor and PT.PN VIII as the suppliers There are three aspects which measure in dinamic competitive, there are cost-capability ratio, market development and financial discipline. From the analysis of the dynamic competitive of the leadfirm and suppliers, it shows that the configuration strategy of global production network builds between Unilever Global and PT.PN VIII is interfirm-control. This interfirm-control configuration makes Indonesia tea industry has less control in price decision and production rule.

The trouble with global production networks

Some sympathetic critics have recently found trouble with the latest iteration of the global production networks theory (GPN 2.0) developed in economic geography. I term these immanent critiques “GPN trouble” and address them in this Exchanges paper in relation to GPN 2.0’s conceptualization of value and risk and its perceived “missing” elements of the state, labour, and so on. Reiterating briefly its core tenet, I first demonstrate GPN 2.0’s modest role as a meso theory of industrial organization and economic development in an interconnected world economy. I argue that empirical analysis based on GPN 2.0 must open up the “black box” of production networks in order to evaluate the causal links between network dynamics and uneven development outcomes. Second, I show how understanding these causal links can provide better answers to the crucial question of “in what sense a GPN problem?” Addressing both issues appropriately will likely reduce the sort of “GPN trouble” one might encounter in future research on global economic restructuring during and after the Covid-19 pandemic.

Global Production Networks and (Distributional) Regional Development: The Cinnamon Industry in Karandeniya and Matale, Sri Lanka

The purpose of this article is to examine the multi-spatial and developmental dynamics of the cinnamon industry in Sri Lanka, the largest exporter in the world by value added. This contribution compares Karandeniya, a major traditional cultivating hub, and Matale, a region new to cinnamon cultivation, deploying a Global Production Network (GPN) framework inclusive of regional development considerations. Analyses, based on input from 23 semi-structured, in-depth interviews, examine the potential for all stakeholders to acquire equity or ‘how’ captured value influences the region ‘and’ individual actors over the course of development. Fieldwork reveals four upstream actors in the cinnamon industry, namely—farmers, peelers, collectors and exporting firms. Results indicate that the cinnamon boom led to strategic decoupling with the exporting firms in Colombo and subsequent strategic recoupling with other actors. The primary contribution of the research rests in the interpretation of resulting structural changes in each region from a bifurcated view of regional development. Based on regional economic growth, Karandeniya appears to be more successful. However, considering the extent of value distribution within the region, Matale is on a more inclusive trajectory vis-à-vis cinnamon exports. Based on these results, three implications for GPN theory and related development policy are suggested.

Temporality and the evolution of GPNs: remaking BHP’s Pilbara iron ore network

ABSTRACT Global production networks (GPNs) exist across time as well as space, an idea that is underplayed within GPN theory. To consider how time influences the remaking of the network and region, the paper explores the temporal development of one iron ore GPN in the Pilbara region of Western Australia. Its emphasis is on temporality and, drawing upon evolutionary economic geography (EEG), the paper shows that GPNs are created over and with time. This makes a singular contribution to GPN theory by simultaneously explaining the configuration of contemporary networks and in developing an understanding of how actors make and remake networks over and with time.

Global production networks, regional development trajectories and smallholder livelihoods in the Global South

AbstractRecent advances in global production network theory, known as GPN 2.0, provide a theoretically sophisticated framework for understanding the articulation of global production systems with regional development trajectories. However, this framework was largely derived from lessons out of empirical analyses of the strategic coupling and value capture trajectories of firms in certain manufacturing and service sector ‘hot spots’, primarily in East and Southeast Asia, and its wider applicability for other contexts remains uncertain. This paper aims to address this lacuna by examining the potential for GPN 2.0 to understand regional development trajectories in agricultural production landscapes in the Global South dominated by smallholder-based farms that generate outputs for national and international markets. The distinctive characteristics of smallholders throw up significant challenges for the explanatory applicability of GPN 2.0 for rural development, at least as it has been developed so far. A key challenge is that smallholders cannot be considered equivalent to ‘firms’ as conceived in GPN 2.0. To overcome this problem, this paper argues for bringing a livelihoods perspective to bear on GPN 2.0. We illustrate the usefulness of this approach through reference to a case study of potato contract farming in Maharastra, India.

Patterns of change: The dynamics of medicinal plant trade in far-western Nepal

Ethnopharmacological relevanceCombined quantitative and qualitative environmental product trade studies, undertaken in the same location over time, are instrumental in identifying plant species with commercial demand and explaining what drives temporal changes. Yet such dynamic studies are rare, including for Himalayan medicinal plants that have been large-scale traded for millennia. Aim of the studyTo (i) investigate changes in medicinal plant trade in the past 17 years, and (ii) identify the main factors driving changes, using a study of Darchula District in far-western Nepal. Materials and methodsMedicinal plant production network data were collected from March to August 2016, for the fiscal year 2014–15, for Darchula District in far-western Nepal through 167 quantitative (58 harvesters, 38 sub-local traders, 25 local traders, 25 central wholesalers, and 21 regional wholesalers), 61 qualitative (15 sub-local traders, 19 local traders, 15 central wholesalers, and 12 regional wholesalers) interviews, and four focus group discussions. Results were compared to previously unpublished similar data for Darchula District for the year 1997–98, using quantitative and qualitative interviews with 10 local traders, 20 central wholesalers, and 53 regional wholesalers. Data analysis was guided by an analytical framework derived from Global Production Network theory. Quantitative data were used to estimate changes in 12 indicators while the qualitative information allowed identification of the factors driving observed changes in the indicators. ResultsThe volume of medicinal plants traded from Darchula District in the fiscal year 2014–15 was 401 t with a harvester value of USD 5.5 million, representing a 2.3 fold increase in volume and 17.2 fold increase in value compared to 1997–98. Trade in the two observation years comprised 30 air-dried plant products (from 28 identified species as well as lichens and a mineral substance); 12 products were traded in both periods, while seven disappeared, and 11 new products entered the trade. The number of traders increased from 10 to 63, mainly due to the emergence of a single high value product yarsagumba (Ophiocordyceps sinensis), a fungus-caterpillar complex which alone contributed 85% of total trade value. Over the observed time period, harvesters and traders increased their margins at the cost of central wholesalers, indicating that market changes favoured lower tier actors, eroding the previously identified passive central wholesaler oligopsony in Nepal. Important drivers of market changes are: (i) rising incomes in China and India, expressed through demand for new products and increasing per unit prices for a range of products, (ii) expanding infrastructure (roads and telecommunications) towards and into harvesting sites, reducing transport costs and increasing market efficiency, and (iii) government interventions, causing disappearance of some species from trade. These market changes also led to increased cultivation at lower altitudes, and a sharp increase in the number of processor industries in Nepal. ConclusionTrade in medicinal plant products in far-western Nepal in the past two decades has increased substantially, doubling in volume and increasing 17 fold in value. There is a backbone of constantly traded species but also species that disappear from trade and new species that enter. Changes favour harvesters and traders at the benefit of central wholesalers whose previous passive oligopsony is disappearing. The three main drivers of change are rising incomes in China and India, expanding infrastructure, and government interventions in Nepal. Commercial medicinal plant resources are a substantial asset that appears to offer opportunities for economic development in far-western Nepal. The trade, however, may pose sustainability threats that are best understood by combining species-level biophysical, trade, and consumer studies.

Lead Firms in the Cocoa–Chocolate Global Production Network: An Assessment of the Deductive Capabilities of GPN 2.0

abstractRecent models of Global Production Network Theory (known as GPN 2.0) have attempted to theoretically explain the underlying determinants, or causal drivers, of particular industry network configurations, which in turn shape the territorial outcomes for regional development. To date, the ability of this ambitious conceptual model to thereby explain economic geography has remained largely untested beyond the select industry networks examined by its proponents, most notably the electronics, retail, and automotive sectors of East Asia. In this article, we stress test the causative model for the case of lead firms in the global cocoa–chocolate sector, and assess its ability to subsequently explain industry configurations and territorial outcomes in a particular country: Indonesia. Our application suggests that GPN 2.0 has considerable utility for directing empirical research, but challenges beset its fuller theoretical promise. We identify a problematic relationship between the deductive causality implied by GPN 2.0 and the inherent relationality of GPN 1.0 that remains, in our view, unresolved. As a result, we remain skeptical of the broader theoretical claims that GPN 2.0 possesses explanatory powers capable of deducing industry network configurations from a discrete set of supposedly independent variables.

Upgrading of Developing Countries Industrial Clusters Firms: Conceptual-Theoretical Framework

Industrial clusters in developing countries exhibit the properties of labour intensive, low-tech and low-cost manufacturing hubs in the global production networks. This research argues that institutional architecture of global production networks provides an opportunity to these industrial clusters of developing countries to create value through 'knowledge links' between the firms and non-firms actors of global production networks and innovation systems (ISs) in which the clustered firms are embedded. The research develops a hypothesis for a potential upgrading of industrial cluster firms through the support of knowledge institutes embedded in the network structures of regional innovation systems, national innovation systems and global production networks. The conceptual-theoretical framework is designed by connecting the cluster theory, innovation system framework and global production networks theory for an assessment of the upgrading of developing countries industrial clusters within global production networks. From an institutional perspective, this research classifies the knowledge links as 'technological-knowledge' and 'organisational-knowledge' links between the firm and non-firms actors of global production networks and innovation systems. A further future research can empirically test this designed framework through data of the industrial clusters firms, participating in the global production networks.

Sustaining Competitiveness: Moving Towards Upstream Manufacturing in Specialized-Market-Based Clusters in the Chinese Toy Industry

Western industrial cluster literature pays little attention to specialized markets (SMs) and the geographical agglomeration of distributors or sale agencies (SAs). This paper takes Linyin, Shandong, a famous commodity city in Northeastern China, as an example, to discuss the determinants that make SAs in SMs of the toy industry move towards upstream manufacturing. A structured questionnaire survey and subsequent interviews were carried out during 2011 and 2012 to collect data, and a Binary Logistic Regression Model was used to process the data. This paper looks from the perspective of global production networks theory, establishes an analytical framework that combines individual motivations of intra-firm coordination, local inter-firm relationships and dynamic cross-regional level relationships. The findings indicate that the expansion of SAs towards manufacturing allows them to sustain competitiveness under changing circumstances. The local inter-firm relationships within SM-based clusters not only makes it easy to obtain material and human resources with lower manufacturing costs, but also facilitates the access to production knowledge and technologies for an expansion of production scale. Cross-regional relationships with suppliers provide an informal channel for SAs to obtain skills, which is fundamental for an expansion into manufacturing. In addition, it is a preference for strengthening competitiveness rather than the simple pursuit of economic profit that encourages SAs to invest in manufacturing.