Global Production Networks (GPN)
Making the connections: Global Production Networks in Europe and East Asia
A research project funded by the UK Economic and Social Research Council
Introduction
This research project investigates the extent to which the EU, East Asia and Eastern Europe constitute an increasingly interconnected nexus of economic relationships, manifested primarily through the complex production networks of East Asian and EU firms. Its specific focus will be on the production and distributional linkages that EU firms have established in East Asia and in Eastern Europe and that East Asian firms have established in the EU and in Eastern Europe. A particular concern relates to the implications of such networks for national and local development.
The networks will be investigated through the empirical lenses of three specific sectors: electronics, automobile components and retailing. Each of these sectors is highly significant from both a European and an East Asian perspective, but in different ways. Our working hypothesis is that the production networks within each sector are differentiated both according to firm-specific characteristics (in part determined by the firm‘s country of origin and the cultural-institutional context in which it is embedded) and in the ways in which different places are incorporated into the networks.
The research will be based upon the concept of the global production network (GPN). Production networks - the nexus of interconnected functions and operations through which goods and services are produced and distributed - have become both organizationally more complex and also increasingly global in their geographical extent. Such networks not only integrate firms (and parts of firms) into structures which blur traditional organizational boundaries, through the development of diverse forms of equity and non-equity relationships, but also integrate national economies (or parts of such economies) in ways which have enormous implications for such economies' well-being. At the same time, the precise nature and articulation of such firm-centred production networks are deeply influenced by the concrete socio-political contexts within which they are embedded, produced and reproduced. The process is especially complex because while the latter are essentially territorially specific (primarily, though not exclusively, at the level of the nation-state) the production networks themselves are not. They ‘cut through’ state boundaries in highly differentiated ways, influenced in part by regulatory and non-regulatory barriers and local socio-cultural conditions, to create structures which are ‘discontinuously territorial’. The geographical scale at which production networks are being configured continues to widen and to become far more complex.
The key research questions to be investigated are:
- How are production networks in the three focal sectors configured, both organizationally and geographically, within and across the three regions?
- How are the individual economies of the EU, East Asia and Eastern Europe incorporated into these firm-centred production networks?
- To what extent are the economies of Eastern Europe seen as alternative or complementary foci for direct investment by EU and East Asian firms?
- What are the implications of such processes (e.g. with respect to expanding employment opportunities, technological upgrading, skill development, value creation, competitiveness etc.) for both the firms and economies involved?
- To what extent are national/local institutions capable of exerting an influence on the strategic development of firms' production networks?
This research is being conducted at an especially significant juncture, when the economic and political contexts of European business relations with East Asia - and vice versa - are in flux for a variety of reasons: the consequences of the East Asian economic crisis for investment and competition; the imminent absorption of several Eastern European countries into the EU; the attempts to develop an international forum - ASEM - to help negotiate EU-East Asian relations. While the current period is one of some instability in the business relations between these regions, it provides a propitious moment to chart their nature and assess their significance for firms and economies in the various locations.