Joining Pre-Existing Production Networks: An Implications for South-East Asian Economic Integration

Jeongmeen Suh and Jong Duk Kim ()
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Jeongmeen Suh: Korea Institute for International Economic Policy
Jong Duk Kim: Korea Institute for International Economic Policy

No 13-2, Working Papers from Korea Institute for International Economic Policy

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 IPN-related 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 (search for similar items in EconPapers)
JEL-codes: F12 F23 L22 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2013-06-20
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwp:2013_002

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