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Joining Pre-Existing Production Networks: An Implications for South-East Asian Economic Integration

Author

Listed:
  • Suh , Jeongmeen

    (Korea Institute for International Economic Policy)

  • Kim , Jong Duk

    (Korea Institute for International Economic Policy)

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 IPN-related 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.

Suggested Citation

  • Suh , Jeongmeen & Kim , Jong Duk, 2013. "Joining Pre-Existing Production Networks: An Implications for South-East Asian Economic Integration," Working Papers 13-2, Korea Institute for International Economic Policy.
    • Handle: RePEc:ris:kiepwp:2013_002
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    More about this item

    Keywords

    Multinational Corporations; International Production Networks;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure

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