Advanced Search
MyIDEAS: Login to save this paper or follow this series

Production Networks in Asia : A Case Study from the Hard Disk Drive Industry

Contents:

Author Info

  • Daisuke Hiratsuka

    (Asian Development Bank Institute (ADBI))

Abstract

Production networks have been extensively developed in East Asia. Previous studies on production networks used international trade data or input–output tables, but such aggregate data cannot explain how the networks actually operate. With the aim of understanding the features and characteristics of East Asian production networks, this paper examines the procurement system of a HDD assembler operating in Thailand. This micro-level case study found that this particular production network consists mostly of arm’s-length suppliers, who are independent and on an equal footing with the assembler. These arm’s-length suppliers are mostly located in the assembling country, but some are located in neighboring countries. This proximity is necessary to establish good relationships between customer and suppliers and allows problems to be solved as soon as they occur. The arm’s-length suppliers engaged in each country’s leading industries, such as the electronics industry in Malaysia and Singapore and the automobile industry in Thailand, have extended their business to supply the HDD industry. These suppliers have formed an industrial cluster in each country within a two- or three-hour drive area. Each cluster that spans different countries is linked by a well-developed logistic network that employs the just-in-time production method that prevails in East Asia. On a regional level, these separate clusters tend to form international production networks that connect to each other across neighboring countries within a distance that provides a quick response time for problem solving. This study also found that American HDD assemblers outsourced indigenous suppliers in Malaysia and Singapore because American suppliers did not follow the assemblers’ move to the region. However, since Japanese suppliers did follow the Japanese HDD assemblers to the Philippines and Thailand, indigenous suppliers were not outsourced.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.eaber.org/node/23235
Download Restriction: no

Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Microeconomics Working Papers with number 23235.

as in new window
Length:
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:eab:microe:23235

Contact details of provider:
Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
Web page: http://www.eaber.org
More information through EDIRC

Related research

Keywords: Production Networks; Asia; Hard disk drive industry.;

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Robert C. Feenstra, . "Integration Of Trade And Disintegration Of Production In The Global Economy," Department of Economics, California Davis - Department of Economics 98-06, California Davis - Department of Economics.
  2. Daisuke Hiratsuka, 2011. "Production Networks in Asia : A Case Study from the Hard Disk Drive Industry," Trade Working Papers, East Asian Bureau of Economic Research 23235, East Asian Bureau of Economic Research.
  3. Deardorff, A.V., 1998. "Fragmentation in Simple Trade Models," Working Papers, Research Seminar in International Economics, University of Michigan 422, Research Seminar in International Economics, University of Michigan.
  4. Gene M. Grossman & Elhanan Helpman, 2002. "Outsourcing in a Global Economy," Working Papers, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics. 149, Princeton University, Woodrow Wilson School of Public and International Affairs, Discussion Papers in Economics..
  5. Gordon H. Hanson & Raymond J. Mataloni & Matthew J. Slaughter, 2003. "Vertical Production Networks in Multinational Firms," NBER Working Papers, National Bureau of Economic Research, Inc 9723, National Bureau of Economic Research, Inc.
  6. David Hummels & Jun Ishii & Kei-Mu Yi, 1999. "The nature and growth of vertical specialization in world trade," Staff Reports, Federal Reserve Bank of New York 72, Federal Reserve Bank of New York.
  7. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 99(3), pages 483-99, June.
  8. Hillberry, Russell & Hummels, David, 2008. "Trade responses to geographic frictions: A decomposition using micro-data," European Economic Review, Elsevier, Elsevier, vol. 52(3), pages 527-550, April.
  9. Kei-Mu Yi, 2000. "Can vertical specialization explain the growth of world trade?," Staff Reports, Federal Reserve Bank of New York 96, Federal Reserve Bank of New York.
  10. Mitsuyo Ando & Fukinari Kimura, 2003. "The Formation of International Production and Distribution Networks in East Asia," NBER Working Papers, National Bureau of Economic Research, Inc 10167, National Bureau of Economic Research, Inc.
  11. Fukunari KIMURA, 2009. "The Spatial Structure of Production/Distribution Networks and Its Implication for Technology Transfers and Spillovers," Working Papers, Economic Research Institute for ASEAN and East Asia (ERIA) d005, Economic Research Institute for ASEAN and East Asia (ERIA).
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Willem Thorbecke & Nimesh Salike, 2011. "Understanding Foreign Direct Investment in East Asia," Microeconomics Working Papers, East Asian Bureau of Economic Research 23246, East Asian Bureau of Economic Research.
  2. Soledad Zignago, 2010. "Determinantes del comercio internacional en tiempos de crisis," Working Papers, BBVA Bank, Economic Research Department 1016, BBVA Bank, Economic Research Department.
  3. Daisuke Hiratsuka, 2011. "Production Networks in Asia : A Case Study from the Hard Disk Drive Industry," Microeconomics Working Papers, East Asian Bureau of Economic Research 23235, East Asian Bureau of Economic Research.
  4. Baldwin, Richard, 2006. "Multilateralising Regionalism: Spaghetti Bowls as Building Blocs on the Path to Global Free Trade," CEPR Discussion Papers, C.E.P.R. Discussion Papers 5775, C.E.P.R. Discussion Papers.
  5. Baldwin, Richard E., 2007. "Managing the Noodle Bowl: The Fragility of East Asian Regionalism," Working Papers on Regional Economic Integration, Asian Development Bank 7, Asian Development Bank.
  6. Hiratsuka, Daisuke, 2011. "Production networks in the Asia-Pacific region : facts and policy implications," IDE Discussion Papers, Institute of Developing Economies, Japan External Trade Organization(JETRO) 315, Institute of Developing Economies, Japan External Trade Organization(JETRO).
  7. Aekapol Chongvilaivan, 2012. "Thailand's 2011 flooding: Its impact on direct exports and global supply chains," Working Papers, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada. 11312, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
  8. Cheewatrakoolpong, Kornkarun & Sabhasri, Chayodom & Bunditwattanawong, Nath, 2013. "Impact of the ASEAN Economic Community on ASEAN Production Networks," ADBI Working Papers, Asian Development Bank Institute 409, Asian Development Bank Institute.
  9. Haddad, Mona, 2007. "Trade integration in East Asia : the Role of China and production networks," Policy Research Working Paper Series, The World Bank 4160, The World Bank.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eab:microe:23235. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shiro Armstrong).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.