Global Production Networks and Local Institution Building: The Development of the Information-Technology Industry in Suzhou, China

Jenn-Hwan Wang and Chuan-Kai Lee
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Jenn-Hwan Wang: Sun Yat-Sen Graduate Institute of Social Sciences and Humanities, National Chengchi University, No. 64, Section 2, Chih-Nan Road, Taipei 11605, Taiwan, ROC
Chuan-Kai Lee: Department of Urban Planning, National Chengkung University, 1 University Road, Taiwan 701, Taiwan, ROC

Environment and Planning A, 2007, vol. 39, issue 8, 1873-1888

Abstract: We discuss how global production networks interact with local institutions to shape the ways in which economic development occurs within a region; the region concerned being the Suzhou municipality in China. We argue that the development of Suzhou's information-technology industry has largely resulted from (1) the transformation of global production networks in the 1990s, in which Taiwanese firms played an important role; (2) the local states' active role in transforming local institutions to fit the needs of foreign firms; and (3) Taiwanese investors' engagement in mediating and transplanting related institutions into the locality to meet the demand of global logistics for speed and flexibility. All these have resulted in Suzhou municipality's rapid growth in the information-technology industry and its embeddedness in the fusion of the global and local contexts. However, we will also demonstrate that the power asymmetry of global players and local states in this area has resulted in the creation of industrial clusters that are institutionally embedded but technologically delinked from the localities.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:sae:envira:v:39:y:2007:i:8:p:1873-1888

DOI: 10.1068/a38428

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