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Joining Pre-existing International Production Networks : Implications for India’s Economic Integration to East Asia

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Author Info

  • Jeongmeen Suh

    (Korea Institute for International Economic Policy (KIEP))

  • Jong Duk Kim

Abstract

This study provides a conceptual framework to explain what kinds of difficulties a late-follower will suffer from when it tries to join pre-existing International Production Networks (IPNs). We consider the total production cost minimization problem by a multinational company (MNC) in allocating locations of fragmented production processes across borders. From the clarification of IPNrelated costs, we draw out what structural disadvantages late-follower countries have and provide several policy implications to overcome these disadvantages with more targeted efforts. Especially we put India’s case in the conceptual framework of the IPNs and then look at the hurdles that make India’s participation in the East Asian IPNs hard and sluggish. Relevant data are provided in order to support the theoretical explanations.

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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Microeconomics Working Papers with number 23434.

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Date of creation: Jun 2013
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Handle: RePEc:eab:microe:23434

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Keywords: Multinational Corporations; International Production Networks; East Asia; India; Production cost advantage; analytical model of international production networks;

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