The “Fox–Apple” Partnership in the Global Value Chain: How Did Foreign Direct Investment and Contract Manufacturing Reshape the Landscape of the Electronics Industry?

Guoyong Liang

Chapter 8 in Uncovering Value Added in Trade:New Approaches to Analyzing Global Value Chains, 2015, pp 141-166 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Mirroring the notion of Wintel, we have coined the term Fox–Apple to describe the “alliance” between Foxconn Technology Group, a contract manufacturer headquartered in Taipei, China, and Apple Inc., an American technology company. Within the global electronics industry, the relationship between these two companies is so important that its formation has reshaped the landscape of the industry over the past decade. This relationship is also very typical in the sense that it reflects the characteristics of an emerging new global value chain in electronics. By examining the emergence and expansion of the Fox–Apple partnership, this chapter tries to explore the latest pattern of global production and shed light on the following two questions: What are the new, salient features of global production networks? How have foreign direct investment (FDI) and other modes of multinational companies' international operation (particularly contract manufacturing) led to these features? It proposes a theoretical hypothesis based on ownership, location, and externalization (OLE) advantages for understanding firms' strategic choice between FDI and international outsourcing.

Keywords: Trade; Global Value Chains; Production Networks; Input-output Method; Trade Statistics; Trade Measurement; Trade in Value-Added; Domestic Value-Added; Production Fragmentation; Global Assembly; Trade Relations; Foreign Direct Investment; Manufacturing (search for similar items in EconPapers)
Date: 2015
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