IDEAS home Printed from https://ideas.repec.org/p/cir/cirwor/2011s-64.html
   My bibliography  Save this paper

Product Modularity and the Rise of Global Value Chains: Insights from the Electronics Industry

Author

Listed:
  • Ari Van Assche
  • Byron Gangnes

Abstract

In the field of economics, a vast literature has attributed the rise of global value chains to globalization-related forces such as declining costs of transportation, improvements in communications technology, and institutional and policy reforms in developing countries. Through an in-depth review of the industry transformation in the electronics industry, however, we find that an additional relatively unexplored factor is the modularization of electronics products. We analyze the mechanisms through which product modularization may lead to the rise of global value chains and discuss the implications for future research.

Suggested Citation

  • Ari Van Assche & Byron Gangnes, 2011. "Product Modularity and the Rise of Global Value Chains: Insights from the Electronics Industry," CIRANO Working Papers 2011s-64, CIRANO.
    • Handle: RePEc:cir:cirwor:2011s-64
    as

    Download full text from publisher

    File URL: https://cirano.qc.ca/files/publications/2011s-64.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hart, Oliver & Moore, John, 1990. "Property Rights and the Nature of the Firm," Journal of Political Economy, University of Chicago Press, vol. 98(6), pages 1119-1158, December.
    2. Mona Haddad & Ben Shepherd, 2011. "Managing Openness : Trade and Outward-oriented Growth After the Crisis," World Bank Publications - Books, The World Bank Group, number 2283.
    3. Ari Van Assche & Byron Gangnes, 2010. "Electronics production upgrading: is China exceptional?," Applied Economics Letters, Taylor & Francis Journals, vol. 17(5), pages 477-482.
    4. Richard N. Langlois, 2002. "Modularity in Technology and Organization," Chapters, in: Nicolai J. Foss & Peter G. Klein (ed.), Entrepreneurship and the Firm, chapter 2, Edward Elgar Publishing.
    5. Elhanan Helpman, 2006. "Trade, FDI, and the Organization of Firms," Journal of Economic Literature, American Economic Association, vol. 44(3), pages 589-630, September.
    6. Ornelas, Emanuel & Turner, John L., 2008. "Trade liberalization, outsourcing, and the hold-up problem," Journal of International Economics, Elsevier, vol. 74(1), pages 225-241, January.
    7. Barbara J. Spencer, 2005. "International outsourcing and incomplete contracts," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(4), pages 1107-1135, November.
    8. Carl Bonham & Byron Gangnes & Ari Van Assche, 2007. "Fragmentation and East Asia's information technology trade," Applied Economics, Taylor & Francis Journals, vol. 39(2), pages 215-228.
    9. Pol Antras & Elhanan Helpman, 2004. "Global Sourcing," Journal of Political Economy, University of Chicago Press, vol. 112(3), pages 552-580, June.
    10. Mathias Thoenig & Thierry Verdier, 2010. "A macroeconomic perspective on Knowledge Management," Journal of Economic Growth, Springer, vol. 15(1), pages 33-63, March.
    11. Mowery,David C. & Nelson,Richard R. (ed.), 1999. "Sources of Industrial Leadership," Cambridge Books, Cambridge University Press, number 9780521645201, October.
    12. Grossman, Sanford J & Hart, Oliver D, 1986. "The Costs and Benefits of Ownership: A Theory of Vertical and Lateral Integration," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 691-719, August.
    13. Carliss Y. Baldwin, 2008. "Where do transactions come from? Modularity, transactions, and the boundaries of firms," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 17(1), pages 155-195, February.
    14. Ma, Alyson C. & Van Assche, Ari & Hong, Chang, 2009. "Global production networks and China's processing trade," Journal of Asian Economics, Elsevier, vol. 20(6), pages 640-654, November.
    15. 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.
    16. Joseph E. Stiglitz & Shahid Yusuf, 2001. "Rethinking the East Asian Miracle," World Bank Publications - Books, The World Bank Group, number 13969.
    17. 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, April.
    18. repec:hrv:faseco:4784029 is not listed on IDEAS
    19. Ram Mudambi, 2008. "Location, control and innovation in knowledge-intensive industries," Journal of Economic Geography, Oxford University Press, vol. 8(5), pages 699-725, September.
    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


    Cited by:

    1. Monge-González, Ricardo & Zolezzi, Sandro, 2012. "Insertion of Costa Rica in Global Value Chains: A Case Study," IDB Publications (Working Papers) 4256, Inter-American Development Bank.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Byron Gangnes & Ari Van Assche, 2004. "Modular Production Networks in Electronics: the Nexus between Management and Economics Research," Working Papers 21-2004, Singapore Management University, School of Economics.
    2. Nathan Nunn, 2007. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 122(2), pages 569-600.
    3. Dermot Leahy & Catia Montagna, 2006. "'Make-or-Buy' in International Oligopoly and the Role of Competitive Pressure," Dundee Discussion Papers in Economics 197, Economic Studies, University of Dundee.
    4. Hideshi Itoh, 2006. "The Theories of International Outsourcing and Integration : A Theoretical Overview from the Perspective of Organizational Economics," Microeconomics Working Papers 21891, East Asian Bureau of Economic Research.
    5. Du, Julan & Lu, Yi & Tao, Zhigang, 2009. "Bi-sourcing in the global economy," Journal of International Economics, Elsevier, vol. 77(2), pages 215-222, April.
    6. Defever, Fabrice & Toubal, Farid, 2013. "Productivity, relationship-specific inputs and the sourcing modes of multinationals," Journal of Economic Behavior & Organization, Elsevier, vol. 94(C), pages 345-357.
    7. Defever, Fabrice, 2011. "Incomplete contracts and the impact of globalization on consumer welfare," LSE Research Online Documents on Economics 121914, London School of Economics and Political Science, LSE Library.
    8. Ari Van Assche, 2006. "Modularity and the Organization of International Production," CIRANO Working Papers 2006s-09, CIRANO.
    9. Fabrice Defever & Farid Toubal, 2007. "Productivity and the Sourcing Modes of Multinational Firms: Evidence from French Firm-Level Data," CEP Discussion Papers dp0842, Centre for Economic Performance, LSE.
    10. Antrà s, Pol & Yeaple, Stephen R., 2014. "Multinational Firms and the Structure of International Trade," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 55-130, Elsevier.
    11. Newman, Andrew & Conconi, Paola & Alfaro, Laura & Fadinger, Harald, 2010. "Trade Policy and Firm Boundaries," CEPR Discussion Papers 7899, C.E.P.R. Discussion Papers.
    12. Van Assche, Ari & Schwartz, Galina A., 2010. "Input specificity and global sourcing," Journal of the Japanese and International Economies, Elsevier, vol. 24(1), pages 69-85, March.
    13. Li, Ben & Lu, Yi, 2009. "Geographic concentration and vertical disintegration: Evidence from China," Journal of Urban Economics, Elsevier, vol. 65(3), pages 294-304, May.
    14. Pol Antràs & Elhanan Helpman, 2006. "Contractual Frictions and Global Sourcing," NBER Working Papers 12747, National Bureau of Economic Research, Inc.
    15. Conconi, Paola & Legros, Patrick & Newman, Andrew F., 2012. "Trade liberalization and organizational change," Journal of International Economics, Elsevier, vol. 86(2), pages 197-208.
    16. Galina A. Schwartz & Ari Van Assche, 2006. "Input Specificity and Global Sourcing," CIRANO Working Papers 2006s-02, CIRANO.
    17. Kohler, Wilhelm & Smolka, Marcel, 2014. "Global sourcing and firm selection," Economics Letters, Elsevier, vol. 124(3), pages 411-415.
    18. Van Assche, Ari, 2008. "Modularity and the organization of international production," Japan and the World Economy, Elsevier, vol. 20(3), pages 353-368, August.
    19. Leahy, Dermot & Montagna, Catia, 2012. "Strategic investment and international outsourcing in unionised oligopoly," Labour Economics, Elsevier, vol. 19(2), pages 260-269.
    20. Elhanan Helpman, 2006. "Trade, FDI, and the Organization of Firms," Journal of Economic Literature, American Economic Association, vol. 44(3), pages 589-630, September.

    More about this item

    Keywords

    modularity; global value chains; electronics; upgrading;
    All these keywords.

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cir:cirwor:2011s-64. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Webmaster (email available below). General contact details of provider: https://edirc.repec.org/data/ciranca.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.