Joining Pre-existing International Production Networks: Implications for India’s Economic Integration to East Asia

Jeongmeen Suh and Jong Duk Kim

Microeconomics Working Papers from East Asian Bureau of Economic Research

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 IPNrelated 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.

Keywords: Multinational Corporations; International Production Networks; East Asia; India; Production cost advantage; analytical model of international production networks (search for similar items in EconPapers)
JEL-codes: F12 F23 L22 (search for similar items in EconPapers)
Date: 2013-06
New Economics Papers: this item is included in nep-cwa and nep-sea
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