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Growing with Global Production Sharing: The Tale of Penang Export Hub

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  • Prema-chandra Athukorala

Abstract

Global production sharing—the division of production processes into geographically separated stages—is a central feature of economic globalization. This study seeks to broaden our understanding of global production sharing, and to explore policy options for developing countries to engage effectively in production networks through a case study of the export production hub in the State of Penang, Malaysia. The findings uphold Penang as a unique example of marrying national development strategy with emerging opportunities for international specialization within global production networks. The state government of Penang has not only attracted major multinational enterprises in global electronics industry but also helped them become deeply rooted in the economy through a well-design investment promotion strategy, infrastructure development, skills development and vocational training, and promoting a domestic vendor network around the branch plants of MNEs.

Suggested Citation

  • Prema-chandra Athukorala, 2011. "Growing with Global Production Sharing: The Tale of Penang Export Hub," Departmental Working Papers 2011-13, The Australian National University, Arndt-Corden Department of Economics.
    • Handle: RePEc:pas:papers:2011-13
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    File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2011/wp_econ_2011_13.pdf
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    References listed on IDEAS

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    1. Yusuf , Shahid & Nabeshima, Kaoru, 2009. "Can Malaysia escape the middle-income Trap ? a strategy for Penang," Policy Research Working Paper Series 4971, The World Bank.
    2. Mike Hobday, 2001. "The Electronics Industries of the Asia–Pacific: Exploiting International Production Networks for Economic Development," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 15(1), pages 13-29, May.
    3. Takayoshi Kusago & Tzannatos, Zafiris, 1998. "Export processing zones : a review in need of update," Social Protection Discussion Papers and Notes 20046, The World Bank.
    4. Rajah Rasiah, 2010. "Are electronics firms in Malaysia catching up in the technology ladder?," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 15(3), pages 301-319.
    5. Timothy J. Sturgeon, 2003. "What really goes on in Silicon Valley? Spatial clustering and dispersal in modular production networks," Journal of Economic Geography, Oxford University Press, vol. 3(2), pages 199-225, April.
    6. Javier Revilla Diez & Matthias Kiese, 2006. "Scaling Innovation in South East Asia: Empirical Evidence from Singapore, Penang (Malaysia) and Bangkok," Regional Studies, Taylor & Francis Journals, vol. 40(9), pages 1005-1023.
    7. Shahid Yusuf & M. Anjum Altaf & Kaoru Nabeshima, 2004. "Global Production Networking and Technological Change in East Asia," World Bank Publications - Books, The World Bank Group, number 14918.
    8. Prema-chandra Athukorala, 2011. "Production Networks and Trade Patterns in East Asia: Regionalization or Globalization?," Asian Economic Papers, MIT Press, vol. 10(1), pages 65-95, Winter/Sp.
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    Cited by:

    1. Wannaphong Durongkaveroj, 2022. "Employment effects of joining global production networks: Does domestic value added matter?," Review of Development Economics, Wiley Blackwell, vol. 26(3), pages 1269-1285, August.
    2. Athukorala, Prema-chandra, 2014. "How India Fits into Global Production Sharing: Experience, Prospects, and Policy Options," India Policy Forum, National Council of Applied Economic Research, vol. 10(1), pages 57-116.
    3. Prema-chandra Athukorala & Archanun Kohpaiboon, 2013. "Global Production Sharing, Trade Patterns and Industrialization in Southeast Asia," Departmental Working Papers 2013-18, The Australian National University, Arndt-Corden Department of Economics.
    4. Mitsuyo Ando & Fukunari Kimura, 2014. "Evolution of Machinery Production Networks: Linkage of North America with East Asia," Asian Economic Papers, MIT Press, vol. 13(3), pages 121-160, Fall.
    5. Chris Manning & Raden M. Purnagunawan, 2011. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 47(3), pages 303-332, December.
    6. Russell Thomson & Prema-Chandra Athukorala, 2020. "Global production networks and the evolution of industrial capabilities: does production sharing warp the product space?," Oxford Economic Papers, Oxford University Press, vol. 72(3), pages 731-747.
    7. THORBECKE, Willem, 2012. "The Short- and Long-Run Effects of Exchange Rate Changes on the Japanese Electronics Industry," Discussion papers 12019, Research Institute of Economy, Trade and Industry (RIETI).
    8. Andrew Jia-Yi Kam, 2013. "International production networks and host country productivity: evidence from Malaysia," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 27(1), pages 127-146, May.
    9. Valentina De Marchi & Elisa Giuliani & Roberta Rabellotti, 2018. "Do Global Value Chains Offer Developing Countries Learning and Innovation Opportunities?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 389-407, July.
    10. Doner, Richard, 2012. "Success as Trap? Crisis Response And Challenges To Economic Upgrading in Export-Oriented Southeast Asia," Working Papers 45, JICA Research Institute.
    11. Millanida Hilman, Rafiazka & Widodo, Tri, 2015. "Global Production Sharing in Machinery and Transport Equipment Industry in the ASEAN4," MPRA Paper 79663, University Library of Munich, Germany.

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    More about this item

    Keywords

    production sharing; production fragmentation; foreign direct investment; multinational enterprises;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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