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

Author Info

  • Byron Gangnes

    ()

    (School of Economics and Social Sciences, Singapore Management University)

  • Ari Van Assche

    ()

    (University of California at Davis)

Abstract

In the last two decades, the electronics industry has evolved from a vertically integrated industry 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 factors 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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Paper provided by Singapore Management University, School of Economics in its series Working Papers with number 21-2004.

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Length: 25 pages
Date of creation: Sep 2004
Date of revision:
Publication status: Published in SMU Economics and Statistics Working Paper Series
Handle: RePEc:siu:wpaper:21-2004
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Keywords: modularity; electronics; outsourcing; contract manufacturing; East Asia;

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Find related papers by JEL classification:
  • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
  • L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production
  • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment

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  1. Langlois, Richard N., 2002. "Modularity in technology and organization," Journal of Economic Behavior & Organization, Elsevier, vol. 49(1), pages 19-37, September.
  2. Joseph E. Stiglitz & Shahid Yusuf, 2001. "Rethinking the East Asian Miracle," World Bank Publications, The World Bank, number 13969, April.
  3. Dieter Ernst, 2002. "Global Production Networks in East Asia's Electronics Industry and Upgrading Perspectives in Malaysia," Economics Study Area Working Papers wp44, East-West Center, Economics Study Area, revised Oct 2003.
  4. 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.
  5. David L. 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.
  6. 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.
  7. Shahid Yusuf, 2003. "Innovative East Asia : The Future of Growth," World Bank Publications, The World Bank, number 15158, April.
  8. 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.
  9. Antràs, Pol & Helpman, Elhanan, 2004. "Global Sourcing," CEPR Discussion Papers 4170, C.E.P.R. Discussion Papers.
  10. 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.
  11. Dieter Ernst, 2003. "How Sustainable are Benefits from Global Production Networks? Malaysia's Upgrading Prospects in the Electronics Industry," Economics Study Area Working Papers 57, East-West Center, Economics Study Area.
  12. 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.
  13. Ulrich, Karl, 1995. "The role of product architecture in the manufacturing firm," Research Policy, Elsevier, vol. 24(3), pages 419-440, May.
  14. John McLaren, 2000. ""Globalization" and Vertical Structure," American Economic Review, American Economic Association, vol. 90(5), pages 1239-1254, December.
  15. Oliver Hart & John Moore, 1988. "Property Rights and the Nature of the Firm," Working papers 495, Massachusetts Institute of Technology (MIT), Department of Economics.
  16. Gene M. Grossman & Elhanan Helpman, 2002. "Integration versus Outsourcing in Industry Equilibrium," The Quarterly Journal of Economics, Oxford University Press, vol. 117(1), pages 85-120.
  17. repec:hrv:faseco:4784029 is not listed on IDEAS
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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. 117(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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