Transnational Production Networks Research Articles

THEORISING THE LOCAL ADAPTATION OF TRANSNATIONAL CERTIFICATION STANDARDS

AbstractOver the last three decades, transnational certification standards have proliferated to fill perceived ‘governance gaps’ in developing countries. Transnational non-governmental organisations and private standards-setting agencies have developed standards that cover a vast range of areas such as labour rights, social justice and environmental protection. As a form of private transnational regulation, certification standards travel through transnational production networks that link lead firms in developed countries with supplier firms in developing countries. This article draws on a case study about coffee certification to challenge the conventional understanding of transnational certification as a contractual conduit that transfers encoded certification standards from senders to receivers. It shows how transnational certification standards interact with, and remake local regulatory landscapes as they pass through. This interaction between global and local knowledge compels us to see transnational standards as a protean, highly localised regulatory process rather than stable universal norms. The article concludes that transnational certification does not function like an integrated ‘joined-up’ process and it is better understood as a mode of polycentric regulation that decentres and fragments transnational norms and standards.

Relative positions of countries in the core-periphery structure of the European automotive industry

This article investigates the core-semiperiphery-periphery structure of the European automotive industry between 2003 and 2017 by drawing on the global value chains and global production networks perspectives and on the conceptual explanation of the spatial division of labor in transnational production networks in the automotive industry. It develops a methodology to empirically determine the relative position of countries in the core, semiperiphery, or periphery, and changes in their position over time. The methodology is based on calculating the automotive industry power of individual countries, which is the combination of trade-based positional power, ownership and control power, and innovation power in the automotive industry. On the one hand, the empirical analysis revealed a dominant position of Germany as a higher-order core, which is joined only by France and Italy in the stable core of the European automotive industry. On the other hand, the periphery is mostly located in East-Central Europe despite the rapid growth of the automotive industry there since the 1990s. The majority of countries kept a stable relative position in the core-semiperiphery-periphery structure of the European automotive industry transnational production system during the 2003–2017 period.

Speeding Up “Slowbalization”: The Political Economy of Global Production before and after COVID-19

The global spread of the COVID-19 pandemic in early 2020 brutally exposed the vulnerabilities of hyperconnected just-in-time production networks. It was met by prominent calls by business and political leaders to prioritize resilience over efficiency and to reshore global production. About one year later, this commentary provides an early assessment of the extent to which the COVID-19 pandemic has altered the political economy of globalized production. Rather than fundamentally changing the structural organization of multinational corporations, it is argued, the pandemic highlighted and accelerated important trends that were already well underway before the outbreak of the pandemic. Even though the COVID-19 crisis has not fundamentally altered infrastructures of global production, there are indications that transnational production networks may be in the process of bifurcating further into US- and China-centered spheres—with more cross-border integration within but less across the two—in the years to come.

Labour-process-related Racism in Transnational European Production: Fragmenting Work meets Xenophobic Culturalisation among Workers

This article discusses labour-process-related racism and xenophobia among workers. It uses empirical findings from different projects to argue that, to a large extent, actual racism and xenophobia refer to experiences of objectification/reification, namely by harsh social competition in contemporary fragmented and transnationalised production. Racism and xenophobia are discussed as specific forms of subjectification which reproduce and stabilise these competitive social relations among workers, within and beyond countries. Racism thus is part of a “restrictive agency” developed by workers – that is, their orientation towards the subordination under objectifying, seemingly non-changeable structures. As a consequence, the article concludes, the repressive structures have to be questioned, and for this purpose the intense debate on racism and right-wing populism among workers is one-sided; there must be more attention paid to progressive labour-process-related, universalistic orientations that exist, despite already long-lasting neo-liberalism.
 KEY WORDS: racism; Labour Process Theory; transnational production networks; fragmentation; Europeanisation; Critical Psychology

National development through global production networks? The case of Dongguan, China

The wide-ranging implications of globalised production networks (GPNs) for national varieties of capitalism are only now beginning to be broached by political economists and human geographers. As production processes increasingly striate national political territories, an area in need of further research is the impact of GPNs on developing economies’ state architectures — which have historically utilised state-owned or state-directed industries in pursuit of national development projects. The advent of GPNs radically altered the possibilities for such strategies by apparently undermining the ability of developing states to develop national champions — large, vertically integrated firms either nationally owned if not subject to great levels of state control. Does the preponderance of transnational production networks, SMEs, foreign direct investment, and export processing zones entail an end to the significance of national states and politics for development trajectories? Experience suggests otherwise, and a literature is beginning to theorise various forms by which statehood, sovereignty and politics continue to shape GPN-organised manufacturing. The reciprocal interactivity of networks and institutions remains in need of further research, however.This article probes these questions with reference to a detailed case study of the developmental experience of Dongguan city in China between 1978 and 2008. In this period, Dongguan (a major export manufacturing hub on the southern coast) came to the forefront of China's national strategy of export-led industrialisation — but simultaneously crystallised the rise of fragmented production. The city's industrialisation was governed by this contradictory dynamic – on the one hand, GPN-integration transformed its social and political order, while subsequent interventions by the provincial and national states aimed to envelop the city in the institutional framework of China's political economy.

ПОЛИТИЧЕСКИЕ РИСКИ ЗАРУБЕЖНЫХ ИНВЕСТИЦИЙ РОССИЙСКИХ КОМПАНИЙ

The article analyzes political risks faced by the Russian companies in their foreign investment activities. The concept of political risks and their main types are considered. Since the bulk of the capital outflow from Russia goes to European countries, the main attention is paid to political risks, accompanying investments in the countries of this region. The peculiarity of the current situation is that the worsening of political relations with Western countries has led not only to an increase in external political risks that affect the foreign investment activity of Russian companies, but also weakened the investment attractiveness of the Russian economy itself. The Russian business is squeezed between the grips of high internal and external risks. The increase of political risks worsens access to the sources of raw materials and markets, restricts the receipt of new technologies, impedes the participation of Russian companies in the transnational production networks and slows down the economic growth. Analysis of investment risks leads to the conclusion that there is a need for institutional reforms within the country and normalization of political relations with developed countries. Among the political risks faced by Russian investors in Europe the most important are the risks associated with the course of European integration, sanctions and EC energy policy. The threat of the disintegration of the European economic space represents a significant investment risk. But an excessively rapid movement along the path of integration is also dangerous since it is accompanied by radical transformation of the regulatory framework and is fraught with the unbalancing of the integration process. Sanctions limited the sources of investment finance and spheres of capital application, increased the risks of discriminatory treatment of Russian companies abroad. Political investment risks for Russian companies are rising in the context of Brussels’ energy policy of diversifying gas sources. The construction of gas pipelines is especially highly sensitive to political risks. It is important for the investor not just to secure the guarantees of the buyer, but to attract financing from his side in order to share investment risks with him.

Integration of the Czech brewing industry into global production networks

This article analyzes the Czech brewing industry and its integration in transnational production networks by drawing on the perspective of global production networks (GPNs). It evaluates the geographical structure of the Czech brewing industry, the inflow of foreign direct investment after 1990, and the integration of Czech breweries into GPNs dominated by foreign transnational corporations. The article analyzes major changes the Czech brewing industry has experienced during the post-1990 economic transformation, presents the current state of the industry from the geographical perspective, and identifies four different forms of involvement of Czech breweries in brewing industry GPNs.

Global imbalances and asymmetric returns to US foreign assets: fitting the missing pieces of the US balance of payments puzzle

The issue of whether the US earns a persistently higher return on its foreign direct investment (relative to returns to foreign-owned direct investment in the US) has received considerable attention but little closure in the ‘global imbalances’ debate. Measuring the rate of returns to US direct investment abroad and foreign direct investment in the US we find higher returns to US foreign direct investment relative to its foreign counterparts in the US. Given the evidence indicating higher returns to US direct investment overseas, we link the irresolution in the contemporary literature regarding the existence of these returns to the unsettled debate over the origin of global imbalances. Reviewing the macro-financial literature on global imbalances, we find a failure to acknowledge that the US current account deficit is, in part, the outcome of transnational production networks in a global economy under-pinned by dollar hegemony. Given the growth in US multinational supply chains, we argue that the US trade deficit is consistent with asymmetric returns to US direct investment and that the sustainability of these return differentials rests on the stability of the status quo.

Beyond NAFTA with Three Countries: The Impact of Global Value Chains on an Outdated Trade Agreement

This article shows how the North American Free Trade Agreement (NAFTA) is significantly affected by the redeployment of transpacific specialized value chains and production networks. More specifically, our study looks at the repositioning of NAFTA partners with new transnational production networks which point to the need for new trading schemes redeploying regional strategies on the transpacific axis. We used the ICT sector as an empirical case showing how China had become a key partner for the three NAFTA partners. This suggests changes in the process of regional economic integration/disintegration. Yet, a closer look at the global value chain of Apple indicates that US enterprises play a pivotal role in this transformation. Our findings point to the fact that the regional integration is significantly affected by emerging transpacific production networks linking the NAFTA regional trade pact to a new transpacific economic space. This can help explain the importance for the three countries to negotiate transpacific trade agreements like the Transpacific Trade Partnership which can be viewed as a de facto renegotiation of NAFTA, 20 years after its emergence as a regional trading model.

How manufacturing industries connect cities across the world: extending research on ‘multiple globalizations’

AbstractIn this article, I concentrate on a macro‐level analysis of inter‐urban linkages in a ‘world city network’. Empirical research on the formation of a world city network has mostly concentrated on global service providers. Yet, globally operating manufacturing firms also choose distinct urban regions throughout the world as locational anchoring points. In this article, using social network analysis, I present the first global‐scale analysis of how manufacturing firms connected cities across the world (in 2010). To detect the differing ‘sectoral profiles’ and nodal centralities of cities functioning as geographical hubs of transnational production networks, it is necessary to analyse the network structure of distinct industrial subsectors within the global urban system. The data collected for analysis cover 120 top global firms from three manufacturing subsectors, of which two are analysed in more detail than the third. I then compare the nodal centralities of cities included in these subsectors' global networks with the GaWC research on the producer services sector that has been at the centre of previous analyses of the world city network. The comparison reveals the cities' differing positioning within ‘multiple globalizations’. The aim of the article is to extend research on world city networks.

Estructura y recomposición de la industria automotriz mundial. Oportunidades y perspectivas para México

This paper frames the relevance of the hierarchies in the transnational production networks of the automotive industry; the role of Mexico in the economic space of the nafta in the recomposition stage of the spatial localization of the great automotive firms from the United States, and their perspectives when confronting a horizon of dominance by corporations and production spaces from the Asia pacific region.

Global Pharmaceutical and Biotechnology Firms’ Linkages in the World City Network

This article concentrates on the connectivity of global pharmaceutical and biotechnology firms in the contemporary ‘world city network’ that constitutes a ‘space of flows’ in which particular urban regions achieve an outstanding nodal centrality. World city network analyses have mostly concentrated on global service providers. Yet globally operating manufacturing firms also select distinct urban regions all across the world as locational anchoring points. Thus the network structures of distinct industrial sub-sectors need to be analysed in order to detect the differing nodal centralities and ‘sectoral profiles’ of cities functioning as geographical hubs of transnational production networks. A macro-scale analysis is presented of how the top 40 global firms in the pharmaceutical and biotechnology industry connected cities across the world in 2010. Subsequently, the nodal centralities of cities included in this sub-sector’s global network are compared with the findings of previous analyses that concentrate on the advanced producer services sector.

Development Dynamics of Chinese Resource-Based Investment in Peru and Ecuador

AbstractThis article analyzes the developmental impact of two of the earliest investments made by Chinese companies in South America, the Shougang Corporation's mining activities in Peru and Andes Petroleum’s oil extraction operations in Ecuador. The article draws attention to the importance of contextualizing and disaggregating instances of Chinese resource-based investment in order to adequately grasp the complexity of processes that are contingent to particular regimes of natural resource governance, companies’ backgrounds, and the strength and nature of local reactions, among other factors. It thereby encourages a critical examination of Chinese investment in South America that explores how the characteristics of that investment are reshaped by the long and contested histories of resource extraction in the region, the promotion of and resistance to particular visions of development, the agency of multiply situated and complex actors, and the wider transnational production networks in which resource extraction processes are embedded.

The de facto preferential trade agreement in East Asia

ABSTRACT East Asian countries apply lower tariffs on their neighbors’ products than they are required to under the various trade agreements to which they belong, a concession they grant only rarely to countries outside the region. The result is a de facto preferential trade area in East Asia in which applied tariff rates significantly undercut the legally bound rates. This gap, termed binding overhang, is an under-studied aspect of international political economy, but provides information about the nature of East Asian regionalism. To wit, the regional bias in applied tariffs is driven by transnational production networks that must move components across borders, not geopolitics or state preferences for increased regional integration. This finding supports a ‘bottom up’ interpretation of East Asian regionalism.

The socio-spatial dynamics of development: geographical insights beyond the 2009 World Development Report

The 2009 World Development Report: Reshaping Economic Geography has drawn significant attention to the influence of `first-order' (for example transportation costs, market contexts) geographies on development processes. Despite the recognition, numerous geographers have criticized the Report for its failure to engage with ideas from outside economics, particularly those associated with ‘second-order’ (for example social, political) factors that influence economic development. This paper details three of these missing geographies and demonstrates how urban–regional development is influenced by socio-spatial factors, context-specific mobilities, power asymmetries and the quality of a region's ties to transnational production networks. Beyond highlighting these factors, the paper argues for improved policies through the integration of economists and geographers’ perspectives on the role of density, distance and division in development.

The Place of Disarticulations: Global Commodity Production in La Laguna, Mexico

Studies of the shifting social organization and geography of global garment production have been critical to the development of the commodity chains framework as an important field of study for scholars of political economy in various disciplines. Our paper intervenes in this literature by proposing what we call a ‘disarticulations’ perspective, an approach attentive to historical and spatial processes of accumulation, disinvestment and dispossession that produce the uneven geographies generative of transnational production networks. We make the case for disarticulations as an approach to commodity chains via a case study of a region in north-central Mexico called La Laguna—a celebrated center of export dynamism in the 1990s, following the implementation of the North American Free Trade Agreement (NAFTA), and of rapid decline in the 2000s. Rather than offer a conventional commodity chain analysis of the boom to bust cycle in La Laguna, which would look to the dynamics of the contemporary apparel chain to explain the causes and consequences of La Laguna's NAFTA-era trajectory, we instead follow La Laguna's ‘travels’ through the cotton, textile, and garment industries over 150 years. We show how the recent NAFTA-era boom was premised on this layered history of engagements with the cotton–textile–apparel commodity chain. The disarticulations approach to commodity chains that we develop here foregrounds the processes of dispossession, accumulation and disinvestment through which not only commodity chains, but the uneven geographies that are their conditions of possibility, are reproduced.

Proactive Compliance? – Repercussions of National Product Regulation in Standards of Transnational Business Networks

This paper (‘Sfb-Arbeitspapier’) illustrates the links between the self-regulation of transnational business networks and the law by analysing the management of chemical substance risks in the electric and electronic equipment industry. National product regulation (and to some extent regulation of production processes) can influence standards employed globally by leading corporations within their network of suppliers and contract manufacturers. However, it is also shown that the diffusion of regulatory standards within transnational production networks is not a linear process: corporate actors to some extent selectively appropriate standards and proactively self-regulate substances of concern that are not yet regulated by state-based law. Similarly, the suppliers may also influence the contents of the standards used in the network.

Opening up telecommunications to competition and MENA integration in the world economy

This paper investigates the potential impact of opening up telecommunications to competition in MENA on the sector's performance and on the participation of the region in the World economy. The latter is assessed with respect to manufactured exports, participation in production networks and attractiveness to FDI. The paper first introduces a model to assess the benefits of telecommunications liberalization on sector performance. Telecommunication liberalization is evaluated on the basis of: (i) degree of effective competition in fixed and mobile networks ; (ii) openness to foreign investment; and (iii) pro-competitive regulation. The results confirm that liberalization and open markets promote efficiency in telecommunications. Regarding the integration of the region in the world economy, the analysis confirms that, better performance of telecommunications strengthens export performance in manufacturing, including exports of intermediate products. Moreover, by facilitating linkages with transnational production networks and reducing the cost of doing business, better telecommunications performance is found to be a determinant of foreign direct investment inflows.

The Embedded Character of Workplace Relations

This article describes an embedded framework for analyzing workplace relations. The author argues that the contemporary workplace is embedded to varying degrees in three force-fields: the macro field of globalization and new technology, the meso field of transnational production networks, and the micro field of local political and labor market institutions and organization structure and culture. The article explores the effect of these influences on management, particularly the way flexibility and cost reduction are prioritized, and the consequences of this for workplace structures and relations. This analysis provides a relevant and shared context for the issues explored in the following five articles. These are briefly introduced in the final section of this article.

Global production and local jobs: can global enterprise networks be used as levers for local development?

AbstractThis article is developed out of a research project on ‘Global Production and Local Jobs’ launched by the International Institute for Labour Studies of the International Labour Organization (ILO). It identifies salient features of global production networks in the automobile, electronics and apparel industries, and discusses their implications for local industrial upgrading, jobs and development policy. The approach combines in novel forms complementary analytical frameworks such as the global value chain and industrial district perspectives, in order to highlight interactions between global and local forces in the operation of transnational production networks. Central issues revealed by this approach include: the rise of entry barriers into the most profitable, service‐intensive activities of global value chains, that reduce small firms' prospects for industrial upgrading; the uneven benefits derived from participation in global production networks at the local level; and the need for local institutions to devise policy responses through a flexible, network‐oriented approach involving a broad local constituency.