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Modular Production Networks in Electronics: The Nexus between Management and Economics Research

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Author Info

  • Byron Gangnes

    ()
    (Department of Economics, University of Hawaii at Manoa)

  • Ari Van Assche

    (Department of Economics, University of California at Santa Cruz)

Abstract

In the last two decades, the electronics industry has evolved from a vertically integrated in-dustry to a vertically segmented one. This transformation has often been attributed to the modularization of electronic products. In this paper, we argue that the degree of modularity is an active choice variable for a firm. As a result, it is necessary to focus on the underlying fac-tors that drive both modularity and the organization of production. This provides insights into the transformation taking place in global electronics production, with vertical fragmentation, horizontal consolidation, and the growth of Asian electronics production.

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File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_04-5.pdf
File Function: First version, 2004
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Bibliographic Info

Paper provided by University of Hawaii at Manoa, Department of Economics in its series Working Papers with number 200405.

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Length: 24 pages
Date of creation: Aug 2004
Date of revision:
Handle: RePEc:hai:wpaper:200405

Note: Also Singapore Management University Economics and Statistics Working Paper 21-2004, September 2004
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Related research

Keywords: Modularity; electronics; outsourcing; contract manufacturing; East Asia;

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References

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  1. Carliss Y. Baldwin & Kim B. Clark, 2000. "Design Rules, Volume 1: The Power of Modularity," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262024667, December.
  2. Joseph E. Stiglitz & Shahid Yusuf, 2001. "Rethinking the East Asian Miracle," World Bank Publications, The World Bank, number 13969, October.
  3. Pol Antras & Elhanan Helpman, 2004. "Global Sourcing," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 552-580, June.
  4. Hart, Oliver D. & Moore, John, 1990. "Property Rights and the Nature of the Firm," Scholarly Articles 3448675, Harvard University Department of Economics.
  5. Ashish Arora & Andrea Fosfuri & Alfonso Gambardella, 2004. "Markets for Technology: The Economics of Innovation and Corporate Strategy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511819, December.
  6. Gene M. Grossman & Elhanan Helpman, 2002. "Integration Versus Outsourcing In Industry Equilibrium," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 85-120, February.
  7. McLaren, J., 1996. "'Globalization' and Vertical Structure," Discussion Papers 1996_21, Columbia University, Department of Economics.
  8. Shahid Yusuf, 2003. "Innovative East Asia : The Future of Growth," World Bank Publications, The World Bank, number 15158, October.
  9. Timothy J. Sturgeon, 2002. "Modular production networks: a new American model of industrial organization," Industrial and Corporate Change, Oxford University Press, vol. 11(3), pages 451-496, June.
  10. Ulrich, Karl, 1995. "The role of product architecture in the manufacturing firm," Research Policy, Elsevier, vol. 24(3), pages 419-440, May.
  11. Langlois, Richard N., 2002. "Modularity in technology and organization," Journal of Economic Behavior & Organization, Elsevier, vol. 49(1), pages 19-37, September.
  12. Boy Luthje, 2002. "Electronics Contract Manufacturing: Global Production and the International Division of Labor in the Age of the Internet," Industry and Innovation, Taylor & Francis Journals, vol. 9(3), pages 227-247.
  13. David Hummels & Dana Rapoport & Kei-Mu Yi, 1998. "Vertical specialization and the changing nature of world trade," Economic Policy Review, Federal Reserve Bank of New York, issue Jun, pages 79-99.
  14. Lowe, Nichola & Kenney, Martin, 1999. "Foreign Investment and the Global Geography of Production: Why the Mexican Consumer Electronics Industry Failed," World Development, Elsevier, vol. 27(8), pages 1427-1443, August.
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Citations

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Cited by:
  1. Vincent Frigant, 2007. "L'impact de la production modulaire sur l'approfondissement de la Division Internationale des Processus Productifs (DIPP)," Revue d'économie politique, Dalloz, vol. 0(6), pages 937-961.
  2. Vincent FRIGANT (GREThA), 2007. "Between Internationalisation and Proximity: the internationalisation process of automotive first tier suppliers," Cahiers du GREThA 2007-13, Groupe de Recherche en Economie Théorique et Appliquée.

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