Global production sharing: exploring Australia's competitive edge

Prema-chandra Athukorala, Tala Talgaswatta and Omer Majeed

Departmental Working Papers from The Australian National University, Arndt-Corden Department of Economics

Abstract: Global production sharing — cross-border dispersion of production processes within vertically integrated global industries — has been an increasingly important structural feature of economic globalization in the recent decades. This paper examines patterns and determinants of global production sharing with an emphasis on how Australian manufacturing fits into global production networks (GPNs). Though Australia is a minor player in GPNs, there is evidence that Australian manufacturing has a distinct competitive edge in specialized, skill-intensive tasks in several industries such as aircrafts, medical devices, machine tools, measuring and scientific equipment, and photographic equipment. Specialization in high-value-to-weight components and final goods within GPNs, which are suitable for air transport, helps Australian manufacturing to overcome the 'tyranny of distance' in world trade. Being predominantly 'relationship-specific', Australian GPN exports are not significantly susceptible to real exchange rate appreciation.

Keywords: Australian manufacturing; global production sharing; global production networks; gravity model (search for similar items in EconPapers)
JEL-codes: F11 F14 F23 M16 (search for similar items in EconPapers)
Pages: 52 pages
Date: 2016
New Economics Papers: this item is included in nep-int and nep-net
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Citations: View citations in EconPapers (2)

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Journal Article: Global production sharing: Exploring Australia's competitive edge (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:pas:papers:2016-05

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