Global Production Network Research Research Articles

A Regulatory‐Developmental Turn Within EU Industrial Policy? The Case of the Battery IPCEIs

The European automotive industry is transitioning from combustion engines to electric vehicles but lags behind international competitors. This geoeconomic competition has contributed to the revival of industrial policy in the EU. However, EU competition policy restricts more vertical industrial policy approaches. In this context, the Important Projects of Common European Interest (IPCEIs) have emerged as a novel governance tool. This article examines this transformation in EU industrial policy by focusing on the Battery IPCEIs. The article includes an in-depth case study of the Battery IPCEIs, using secondary literature and 11 expert interviews. It concludes that IPCEIs represent a gradual regulatory-developmental turn within EU industrial policy by drawing on developmental state theory in a European context, critical EU integration literature, and global production networks research. In response to geoeconomic competition and the region’s lack of productive capacities, the EU is indirectly facilitating the development of European battery innovation and production networks by issuing direct state aid at the national level. However, the EU’s participation in the subsidy race and the global green-tech race via “green” industrial policy indicates only a partial shift in the relationship between states and markets.

Lithium, Brexit and Global Britain: Onshoring battery production networks in the UK

As demand for electrical energy storage scales, production networks for lithium-ion battery manufacturing are being re-worked organisationally and geographically. The UK - like the US and EU - is seeking to onshore lithium-ion battery production and build a national battery supply chain. Governmental, industrial and research actors are engaged in securing battery mineral materials and developing battery manufacturing capacity, in the context of the country's exit from the EU and a perceived ‘global battery race’ in which geopolitical goals shape links with new and old partners. We identify the primary global networks of lithium mining and refining, battery chemical production, technology development and finance in which the UK's battery manufacturing capacity are increasingly embedded. We foreground the role of the UK state, and how it has sought to assemble discrete capacities in automobile manufacturing, battery R&D, materials chemistry, minerals exploration, mining and green finance into a national battery sector. We mobilise a Global Production Network (GPN) perspective to highlight the cross-border geographical and organisational structures through which onshoring is taking place. We extend GPN research on the role of the state by showing how the UK's growing lithium networks intersect with a plural and differentiated state accumulation project of green industrial transformation. We outline the selective nature of this state accumulation project, highlight instances of coupling creation as the state seeks to strategically couple regional assets with firms in GPNs, and point to a convergence of industrial and innovation policy characteristic of the entrepreneurial state.

Inside-out strategic coupling for smallholder market integration – Mango production in Malawi as a test case

Starting from the observation that value chain research has informed much of agricultural development interventions in recent decades, this paper identifies five key challenges to current agricultural development policies in low- and middle-income countries (LMICs): access to finance, infrastructure, land tenure, local linkages and knowledge transfer. Based on this review, it is argued that recent theoretical advances in the global production network (GPN) approach can help to achieve a more holistic view of agricultural development policies than the more linear value chain research. In particular, three key concepts from the GPN approach are highlighted: mobilisation of regional assets, strategic coupling and territorial embeddedness. These key concepts are used to propose a framework called ‘insight-out strategic coupling for smallholder integration’, which builds on the concept of strategic coupling in GPN research and applies it as a development tool to agricultural production. Using an in-depth case study approach, the usefulness of this framework is tested by examining the experience of Malawi Mangoes, a company established to promote smallholder exports. Malawi Mangoes was initially funded by private equity, but despite a number of challenges along the way, was soon able to attract development funding and integrate smallholders from surrounding villages throughout-grower schemes. Analysis of the case shows both the usefulness of the framework and the lost potential in implementing agricultural development policy. The authors conclude that the framework is useful for linking current debates on agricultural development interventions, but that the findings of critical GPN research need to be taken into account when developing agricultural development interventions in order to respect the ‘do no harm’ principle.

Trajectories of value capture, strategic coupling and labour regime reconfiguration: Coal mining, automotives and business services in post-socialist Romania

Drawing on global production network research and conceptual explanations of the changing spatial divisions of labour, this article investigates the transformative effects of the dynamic interplay between strategic coupling and multiscalar changes across labour regimes in Central and Eastern European post-socialist sectoral trajectories. It interrogates critically whether sectors across peripheral regions have been able to slot themselves into lead firms’ transnational production systems, resulting in processes of value creation, value capture or value destruction. The empirical analysis reveals that the capacity of domestic resources to purposively match and align themselves to global lead firms and their strategic objectives is influenced by local historical legacies, spatiality, elite agency and labour agency, which combined to shape distinct meso-level transformations. The methodology is based on analysing the post-socialist transformation of three sectors in Romania, which have different historical legacies, institutional configurations, and spatial and temporal vectors of development, allowing us to trace interactions between different modes of strategic coupling or decoupling and labour regime reconfiguration. The central thrust of the article highlights how different modes of strategic coupling into global production networks, or decoupling from global production networks, are causally linked to the reconfiguration of labour regimes, leading to long-term regional socio-economic transformations.

What can evolutionary economic geography learn from global value chain and global production network research on developing and emerging economies?

ABSTRACT Although evolutionary economic geography (EEG) and global production network (GPN) and global value chain (GVC) research into regional industrial restructuring and development have developed in parallel and with little mutual engagement, they provide important complementary insights. This article concentrates on what the EEG approach can learn from the GVC/GPN approach by focusing on extra-regional linkages, institutional contexts and firm heterogeneity. Analysing the role of these factors not only overcomes some weaknesses of the EEG approach but also plays an especially important role in understanding regional industrial dynamics in developing and emerging economies and in the conduct of policy-relevant research.

Global production networks and natural resource extraction: adding a political ecology perspective

Abstract. The article examines how to adapt the global production network (GPN) approach to situations of natural resource extraction. Based on an integration of a political ecology perspective into GPN research, we exemplarily apply the GPN framework to the primary sector. Based on extensive qualitative fieldwork regarding Argentine lithium mining and Brazilian soy agribusiness we illustrate that particularly a political ecological environmental perspective allows for a more nuanced and critical analysis of ambiguous local development outcomes. While from a purely economic development perspective in both cases the economic activity (integrated into GPNs) is celebrated as an imperative economic growth driver, our framework helps identify the emergence of unilateral dependencies, a decline of social autonomy and an unequal distribution of environmental risks.

Strategies, Struggles, and Sites of Transformation in Korean Political Economy

Strategies, Struggles, and Sites of Transformation in Korean Political Economy

The influence of tariff regimes on global production networks (GPNs)

AbstractDespite the recognition that trade policy—in particular, tariff regimes and rules of origin—can affect the geography of production, much GPN analyses pay scant attention to the tariff context of the sector studied. This paper proposes an analytical framework to more effectively integrate these regimes into applied GPN research. We test the framework, drawing on analysis of exports to the EU market in four sectors: textiles and apparel, floriculture, fisheries and leather goods. The analysis confirms that, in the presence of high tariffs, preferences do seem to impact on sourcing for the EU market.

Filtering strategic coupling: territorial intermediaries in oil and gas global production networks in Southeast Asia

AbstractThe Global Production Network (GPN) approach has not yet considered the importance of territorial intermediaries for strategic coupling. This article demonstrates how the prospects of strategic coupling for the case of Vietnam and Indonesia with the oil and gas GPN are affected by the gateway role of Singapore. Based on interviews, the analysis reveals how Singapore influences regional economic development along the GPN through different filtering mechanisms, limiting the potential for strategic coupling for Vietnam and Indonesia. For GPN research, the identified filtering mechanisms illustrate how the territoriality of GPNs contributes to differentiated territorial outcomes. The findings therefore indicate the need to intensify the appreciation of the particular territorial configuration of GPNs as this yields considerable explanatory power for understanding the unequal contours of the global economy.

Dis/articulations and the interrogation of development in GPN research

In spite of serving as the purported goal of the global production network (GPN) approach, development has been left undefined in the GPN literature, with ‘GPN 2.0’ now offering an impoverished understanding of development. This article reviews the elaboration of the ‘core concepts’ of the GPN approach: value, power, embeddedness – and development. I argue that the dis/articulations perspective is useful in offering a critical interrogation of d/Development, and that this has implications for value, power and embeddedness. The disarticulations perspective takes the determination of value into account and highlights the role of borders and discursive boundaries in structuring power relations

Making a Global Gas Market: Territoriality and Production Networks in Liquefied Natural Gas

abstractEnergy markets are an important contemporary site of economic globalization. In this article we use a global production network (GPN) approach to examine the evolutionary dynamics of the liquefied natural gas (LNG) sector and its role in an emerging global market for natural gas. We extend recent work in the relational economic geography literature on the organizational practices by which production networks are assembled and sustained over time and space; and we address a significantly underdeveloped aspect of GPN research by demonstrating the implications of these practices for the territoriality of GPNs. The article introduces LNG as a techno-material reconfiguration of natural gas that enables it to be moved and sold beyond the continental limits of pipelines. We briefly outline the evolving scale and geographic scope of LNG trade, and introduce the network of firms, extraeconomic actors, and intermediaries through which LNG production, distribution, and marketing are coordinated. Our analysis shows how LNG is evolving from a relatively simple floating pipeline model of point-to-point, binational flows orchestrated by producing and consuming companies and governed by long-term contracts, to a more geographic and organizationally complex production network that is constitutive of an emergent global gas market. Empirically the article provides the first systematic analysis within economic geography of the globalization of the LNG sector and its influence on global gas markets, demonstrating the potential of GPN (and related frameworks) to contribute meaningful analysis of the contemporary political economy of energy. Conceptually the article pushes research on GPN to realize more fully its potential as an analysis of network territoriality by examining how the spatial configuration of GPNs emerges from the organizational structures and coordinating strategies of firms, extraeconomic actors and intermediaries; and by recognizing how network territoriality is constitutive of markets rather than merely responsive to them.

Trans-scalar embeddedness and governance deficits in global production networks: Crisis in South African fruit

The governance of labour in global production networks (GPNs) has become a critical area of concern amongst academics and policymakers alike. To date, GPN research has focused on the role of private company codes and multi-stakeholder ethical initiatives primarily driven by lead-firms. Other GPN studies highlight the critical role of civil society organisations (CSOs) in challenging lead-firm purchasing practices and shaping regulatory outcomes at local production sites. However, GPN research has not sufficiently incorporated the role of nation states in regulating work through legislative frameworks and enforcement regimes, often referred to in the literature as ‘state’ or ‘public’ governance. This is despite a ‘regulatory renaissance’ taking place across certain developing countries, seeking to strengthen their national regulatory labour institutions (Piore and Schrank, 2008:1).The GPN framework provides an analytical lens through which to conceptualise cross-cutting strands of trans-scalar governance regimes, involving complex networks of state, private and civil society actors operating at multiple scales. Notions of territorial and societal embeddedness are used to elucidate how global ethical standards derived from particular country contexts become enmeshed in national regulatory frameworks and local societal relations, shaping governance outcomes for precarious workers incorporated into GPNs. The paper draws attention to the ‘trans-scalar embeddedness’ of labour governance regimes which interact across geographical scales and, in the case of South African fruit, reflect a ‘trans-scalar governance deficit’ for precarious workers. It is argued that the influence of national regulatory regimes should be more fully incorporated into analytical frameworks for understanding governance outcomes in GPNs.

The Geographies of Industrialised Finance: Probing the Global Production Networks of Asset Management

AbstractContemporary finance is highly industrialised in its division of labour and spatial organisation. Using the example of the asset management industry, this article applies the Global Production Network (GPN) framework to the largely disregarded ‘production’ of finance. Whereas acknowledging the GPN's progressive conceptualisation of cross‐boundary relationalities in the organisation of economic globalisation, this article critically engages with three of the concept's core analytical units. First, it challenges the somewhat misleading definition of ‘value’ with regard to speculative financial activities. Second, it argues that the complex, often opaque financial products are outcomes of the increased epistemic nature in the production of finance, which requires a shift in the conceptual and empirical attention of embeddedness towards the defining circuits of knowledge. Third, it contests the neat typology of governance forms by highlighting the proliferation of private contracting in some of the most complex financial GPNs. By probing finance, the article enriches the GPN research portfolio of case studies and interrogates the formulation of some of its core analytical categories. It is further argued that this more holistic approach towards how globalised and financialised finance is organised and coordinated as discussed in this article provides a fruitful alternative to the prevailing neoclassical, econometric understanding in financial studies.

A New Economic Geography of Trade and Development? Governing South–South Trade, Value Chains and Production Networks

While South–South development cooperation has “win–-win” aims, it is unclear the extent to which its horizontal, mutually beneficial objectives translate into “South–South” trade and move beyond the asymmetrical nature of North–South trade. Global value chain and global production network research can make progress into an understanding of the dynamics of these emerging trade patterns. To date, however, such research has largely focused on the development prospects for firms and regions in the global South integrating into the production networks of lead firms from the global North. Evidence presented for the growth of South–South trade, including firms emerging from new home regions and the rise of new end markets in the global South, questions this focus. Emerging research suggests that the growth of South–South trade will be linked to a trade-off involving relatively easier access to Southern markets and potentially greater competition from competitors across the South. Avenues and questions for further research are identified here in terms of the governance, upgrading opportunities and territorial development outcomes associated with South–South chains and networks. Such research can move beyond win–win notions from development cooperation to highlight the commercial realities and very uneven geographies and development outcomes associated with expanding South–South trade.

Integrating Finance into Global Production Networks

Coe N. M., Lai K. P. Y. and Wójcik D. Integrating finance into global production networks, Regional Studies. While successful in its aim of ‘globalizing’ regional development, the global production network (GPN) approach has thus far paid less attention to the role of finance in the dynamics of the global economy and regional development. This lacuna is significant as finance is arguably even more globalized and networked than production. To address this gap the paper distils the concept of the global financial network (GFN) from financial geography and related scholarship, with advanced business services, world cities and offshore jurisdictions at the core. Interactions between the GPN and the GFN are discussed, focusing on the financing and financializing of GPNs and the co-evolution of globalization and financialization. Integrating finance into GPN research entails more than a simple extension of the approach; it would also enrich it conceptually, and enable it methodologically and empirically.

The state, institutional frameworks and the dynamics of capital in global production networks

For some time now, calls have been made for a more adequate theorization of the state and institutional frameworks in work on global production networks (GPNs) and global value chains (GVCs). However, despite claims in GPN research that institutional contexts matter, there remains an absence of theoretical frameworks on the state in GPNs. Consequently, understanding of the relations between state action and the changing geographies of production networks remains in its infancy. This paper explores a strategic-relational understanding of the state and the rearticulation of scales of state formation to understand the dynamics of global production networks in macro-regional spaces.

Global models of networked organization, the positional power of nations and economic development

ABSTRACTInterdisciplinary literature on global commodity chains (GCCs)/global value chains (GVCs) and global production networks (GPNs) contends that inter-firm power differentials within globally networked forms of economic organization have implications for the developmental trajectories of nation-states. In this article, I advance these literatures in three ways. First, I bridge the two approaches by elaborating an exchange-theoretic conceptualization of inter-firm power that is latent in the two literatures. This conceptualization focuses narrowly on the determinants of inter-firm power asymmetries and is useful for explaining why actual production networks vary in terms of the relative power of buyers and producers. Second, I develop an empirical framework to advance basic research on the link between globally networked forms of economic organization and national economic development. In particular, I derive cross-nationally and temporally comparable country-level measurements of the average bargaining power of a country's resident firms using industry-specific international exchange (trade) networks. I demonstrate the validity of these indices through a historical analysis of trade networks in the transport equipment and garment industries and by analysing cross-national variations in wages in the two industries. Finally, I conclude by charting a parallel path for GCC/GVC and GPN research that implicates global models of network organization in macro-comparative analyses of economic development.

Beyond strategic coupling: reassessing the firm-region nexus in global production networks

Global Production Networks (GPNs) have become a key focus of research in economic geography and related fields in recent years. This article has two main aims. First, I offer a critical appraisal of GPN research, focusing on its contribution to the rethinking of regional development processes and the notion of ‘strategic coupling’ in particular. Second, the article aims to forge a new set of links between GPNs and evolutionary economic geography (EEG), which has also attracted considerable recent interest as a framework for assessing the evolution of economic landscapes. In particular, I use evolutionary approaches and the concept of path dependence to develop a broader and deeper conception of the range of coupling, recoupling and decoupling processes that take place between regions and GPNs, going beyond strategic coupling per se.