DLSU-AKI Policy Brief, Volume VII, No. 17
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Publication Detail
DLSU AKI 2005-10: The evolution of East Asian Production Networks: existing trends and policy adjustments on investment incentives across selected Southeast Asian countries

In the last five decades or so, the East Asian region experienced remarkable economic growth that was unparalleled by the rest of the world. The so-called “East Asian miracle”, which exhibited relatively high economic growth rates among East Asian economies, can be attributed to the region’s macroeconomic stability – low inflation, high investments, high savings, human capital development, and openness to trade. Moreover, the region’s impressive economic performance was also associated with the development strategies enforced by governments in the region. (The World Bank 1993) However, it is worthwhile to note that another characteristic of East Asia was the emergence of local and regional production networks during the 1990s. According to Ernst and Kim (2001), an international production network links together the affiliates, joint ventures, and subsidiaries of a multinational corporation (MNC) or a “global network flagship”, with its distributors, strategic partners, service providers, subcontractors, and suppliers. Borrus, Ernst, and Haggard (2000) define international production networks (or in their term “cross-border production networks”) as “the inter- and intra-firm relationships through which the firm organizes the entire range of its business activities: from research and development (R&D), product definition and design, to supply of inputs, manufacturing (or production of a service), distribution, and support services.”

DLSU - Angelo King Institute for Economic and Business Studies
Authors Keywords
Raymundo, Roberto; Taningco, Angelo; investment flows; cross-border transactions; regional production networks (RPNs); production networks; Foreign direct investment (FDI);
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