scholarly journals Keynesian Production Networks and the COVID-19 Crisis: A Simple Benchmark

2021 ◽  
Vol 111 ◽  
pp. 272-276
Author(s):  
David Baqaee ◽  
Emmanuel Farhi
Keyword(s):  
Lower Bound ◽  
Incomplete Markets ◽  
Supply And Demand ◽  
Wage Rigidity ◽  
Remote Work ◽  
Production Network ◽  
Production Networks ◽  
Input Output ◽  
Sufficient Statistics ◽  
Factor Income

The COVID-19 crisis is a seemingly all-encompassing shock to supply and demand. These negative shocks affected industries differently: some switched to remote work, maintaining employment and production, while others reduced capacity and shed workers. We consider a stripped-down version of the model in Baqaee and Farhi (2020). The model allows for an arbitrary input-output network, complementarities, incomplete markets, downward wage rigidity, and a zero lower bound. Nevertheless, the model has a stark property: factor income shares at the initial equilibrium are global sufficient statistics for the production network, clarifying assumptions that must be broken if the network is to matter.

The Invisible Networks of Global Production: Re-Imagining the Global Value Chain in Legal Research

2020 ◽  
Vol 16 (1) ◽  
pp. 95-117
Author(s):  
Anna Beckers
Keyword(s):  
Value Chain ◽  
Value Chains ◽  
Global Value Chain ◽  
Commodity Chain ◽  
Production Network ◽  
Production Networks ◽  
Global Production Networks ◽  
Legal Research ◽  
Legal Rules ◽  
Global Production Network

AbstractReviewing the burgeoning legal scholarship on global value chains to delineate the legal image of the global value chain and then comparing this legal image with images on global production in neighbouring social sciences research, in particular the Global Commodity Chain/Global Value Chain and the Global Production Network approach, this article reveals that legal research strongly aligns with the value chain image, but takes less account of the production-centric network image. The article then outlines a research agenda for legal research that departs from a network perspective on global production. To that end, it proposes that re-imagining the law in a world of global production networks requires a focus in legal research on the legal construction of global production and its infrastructure and a stronger contextualization of governance obligations and liability rules in the light of the issue-specific legal rules that apply to said infrastructure.

scholarly journals A comprehensive KPI network for the performance measurement and management in global production networks

2021 ◽  
Author(s):  
B. Verhaelen ◽  
F. Mayer ◽  
S. Peukert ◽  
G. Lanza
Keyword(s):  
Performance Measurement ◽  
Corporate Strategy ◽  
Performance Indicator ◽  
Production Network ◽  
Manufacturing Companies ◽  
Production Networks ◽  
Global Production Networks ◽  
Performance Review ◽  
And Performance ◽  
Corporate Level

AbstractThe trend of globalization has led to a structural change in the sales and procurement markets of manufacturing companies in recent decades. In order not to be left behind by this change, companies have internationalized their production structures. Global production networks with diverse supply and service interdependencies are the result. However, the management of global production networks is highly complex. Key performance indicator (KPI) networks already exist at the corporate level and site level to support the management of complex systems. However, such KPI networks are not yet available to support the management of entire production networks. In this article, a KPI network for global production networks is presented, which links the key figures of the site level and the corporate level. By integrating both levels into a comprehensive KPI network, cause and effect relationship between the production-related KPIs and the strategic KPIs of a corporate strategy become transparent. To this end, this KPI network is integrated into a Performance Measurement and Management (PMM) methodology. This methodology consists of three phases: performance planning, performance improvement, and performance review. For testing the practical suitability, the PMM methodology is applied to the production network of an automotive supplier using a simulation model to estimate the effects of proposed improvement actions of the methodology.

scholarly journals Globalization of the Automotive Industry: Is Indonesia Missing Out?

2016 ◽  
Vol 15 (1) ◽  
pp. 1-19 ◽  
Author(s):  
Moekti P. Soejachmoen
Keyword(s):  
Export Performance ◽  
Trade Openness ◽  
Absorption Capacity ◽  
Least Square ◽  
Production Network ◽  
Production Networks ◽  
Global Production Networks ◽  
Investment Policies ◽  
Left Behind ◽  
Automotive Production

International trade in automotive and auto parts has grown rapidly during the last two decades but Southeast Asia's largest economy, Indonesia, is lagging behind in its export performance. This paper uses a comparative perspective in examining Indonesia's role in automotive production networks in the context of the contemporary debate on opportunities for reaping gains from economic globalization through engagement in global production sharing. This research aims to answer two questions; the first addresses the determinants of a country's participation in the global production network, the second asks why Indonesia is being left behind in global production networks. Our analysis is based on the Jones and Kierzkowski fragmentation theory. The unbalanced panel trade data for 98 countries for the period 1988–2007 are estimated using the least square dummy variable method. The results show that in Asian countries, foreign direct investment openness is the most important determinant followed by trade cost, trade openness, competitiveness, and labor quality. Indonesia is being left behind for a number of reasons, such as restrictive foreign investment policies, higher trade costs and remaining high protection in the automotive sector in terms of tariff and non-tariff measure, and a low education level that hampers the absorption capacity in technology.

CREATION OF RESEARCH-ORIENTED COMPETENCE-CELL-BASED PRODUCTION NETWORKS

2009 ◽  
Vol 06 (03) ◽  
pp. 283-303 ◽  
Author(s):  
ALEJANDRO MEJIA ◽  
DIETER WEIDLICH
Keyword(s):  
Research Process ◽  
Production Network ◽  
Production Networks ◽  
Innovation Potential ◽  
Research Activities ◽  
Innovative Products ◽  
Innovative Capabilities ◽  
New Ideas ◽  
Internal Sources ◽  
Hierarchical Selection

With the basis that research is one of the most important internal sources for innovation, a new approach to create competence-cell-based production networks focused on research activities is presented. Thus, a research process, specific for competence-cell-based networks, is also described. In this process, which is subdivided in different phases, the competence-cells, as the smallest performance units, are temporarily linked in a production network. They cooperate to carry out industry-oriented applied research to generate new ideas or technologies to be used in innovative products. For this process, an approach for the non-hierarchical selection of the necessary competence cells is also introduced. This selection is accomplished by means of the innovation potential, which is based on parameters that evaluate nearly objectively the innovative capabilities of the competence cells.

Framework for determining the degree of centralization in global production networks

2021 ◽  
Vol 75 (4) ◽  
pp. 537-551
Author(s):  
Günther Schuh ◽  
Andreas Gützlaff ◽  
Julian Ays ◽  
Tino X. Schlosser
Keyword(s):  
Complex Systems ◽  
Network Management ◽  
Environmental Conditions ◽  
Theoretical Framework ◽  
Active Network ◽  
Production Network ◽  
Production Networks ◽  
Global Production Networks

Over the last decades, global production networks have developed to high complex systems. To adapt quickly the dynamic environmental conditions, an active network management is required. The network management and the associated distribution of responsibilities in the production network is mostly grown historically. Further, the issue is only commonly considered in current approaches. Therefore, this paper presents a framework for determining the degree of centralization in global production networks under the aspect of increasing efficiency. Beyond the theoretical framework, a workshop procedure is presented in which the framework can be tested.

scholarly journals Chemical industry and value-added trade – A comparative study on Hungary and Poland

2019 ◽  
Vol 69 (1) ◽  
pp. 81-99 ◽  
Author(s):  
Pawel Folfas ◽  
Beáta Udvari
Keyword(s):  
Economic Policy ◽  
World Economy ◽  
New Products ◽  
Value Added ◽  
Value Chains ◽  
Production Networks ◽  
Input Output ◽  
Global Production Networks ◽  
The World ◽  
Chemical Products

Nowadays, global production networks (GPN) and global value chains (GVC) play an important role in the world economy intensifying the trade and production networks and resulting in products having value-added in different countries. The analysis of how many intermediate products a country imports in order to produce a product and of how many products a country exports to another country in order to produce new products draws the attention to value-added trade. In the present study, we compare the Hungarian and Polish value-added trade of chemicals and chemical products. We use the OECD-WTO data of value-added trade, which is based on an input-output table. By calculating numerous indices, we reveal that the domestic value-added of chemicals and chemical products in the two countries was relatively low and should be increased by adequate economic policy.

scholarly journals Information Application of the Regional Development: Strategic Couplings in Global Production Networks in Jiangsu, China

Information ◽  
2020 ◽  
Vol 11 (9) ◽  
pp. 420
Author(s):  
Haiying Xu ◽  
Wei-Ling Hsu ◽  
Yee-Chaur Lee ◽  
Tian-Yow Chern ◽  
Shr-Wei Luo
Keyword(s):  
Regional Development ◽  
Regional Growth ◽  
Functional Coupling ◽  
Production Network ◽  
Production Networks ◽  
Global Production Networks ◽  
Firm Level ◽  
Value Capture ◽  
Local Supply ◽  
Capture Trajectories

The recent literature concerning globalizing regional development has placed significant emphasis on the Global Production Network (GPN 2.0). GPN 2.0 in economic geography emphasizes that regional growth is caused by a shift in the strategic coupling mode from a low to high level. In addition, GPN 2.0 regards firm-level value capture trajectories as key analytical object, rather than the interactive relationships among scalar and divergent actors in GPN 1.0. To provide a better understanding of causal linkages between the GPNs and uneven regional development in the background of globalization and to test the applicability of GPN 2.0 analysis framework, the paper analyzed 62 Korean-invested automotive firms in Jiangsu Province, China. In order to explore the value capture trajectories of lead firms in the GPNs, the authors applied K-means clustering method to quantitatively analyze the local supply networks of lead firms from organizational and spatial dimensions. Then, comparisons were made between strategic coupling modes of GPNs and regional development in North and South Jiangsu. This study found obvious similarities within these two regions but obvious differences between them in terms of value capture trajectories. We observed that North Jiangsu is currently in the stage of “structural coupling”, whereas South Jiangsu is in the stage of “functional coupling.” Thus, this article argues that spatial settings such as regional assets and autonomy are key factors influencing uneven economic development. This research may provide a crucial reference for the regional development of Jiangsu, China.

scholarly journals Integration of Tactical Aspects into Strategic Production Network Planning

2020 ◽  
Vol 14 (3) ◽  
pp. 281-287
Author(s):  
Elias Auberger ◽  
Christian Ramsauer
Keyword(s):  
Process Model ◽  
Network Planning ◽  
Strategic Decision ◽  
Production Network ◽  
Production Networks ◽  
Strategic Decisions ◽  
Operational Level ◽  
Current Production ◽  
Five Phases ◽  
Internal Production

Nowadays, production companies are facing an increasingly volatile environment. Due to increasing globalization, but also de-globalization, taking into consideration an internal production network is becoming more and more important for companies, all in order to be able to counteract in an agile way the uncertainties such as swings in the demand. Current production network planning procedures focus on (re-)locating decisions without delving into what happens inside the plants, neglecting the dynamics of production networks, following a rigid top-down approach during the configuration phase, and they do not integrate the effects of planning tasks at the factory level (tactical and operational planning). In order to be able to make strategic decisions with a well-founded database regarding the production network, the effects on the tactical and operational level must be considered in an iterative way during the strategic decision-making process. The aim of this research is to define the requirements for an approach to strategic production network planning, which considers the effects at the tactical and operational level in an iterative way, and to develop a process model, derived from the requirements, that in its five phases considers the deficiencies of the existing approaches.

scholarly journals Endogenous Production Networks

Econometrica ◽  
2020 ◽  
Vol 88 (1) ◽  
pp. 33-82 ◽  
Author(s):  
Daron Acemoglu ◽  
Pablo D. Azar
Keyword(s):  
Existence And Uniqueness ◽  
New Product ◽  
Production Network ◽  
Production Networks ◽  
Endogenous Production ◽  
Cost Reductions ◽  
Production Technologies ◽  
Dynamic Version ◽  
Input Prices ◽  
Endogenous Technology

We develop a tractable model of endogenous production networks. Each one of a number of products can be produced by combining labor and an endogenous subset of the other products as inputs. Different combinations of inputs generate (prespecified) levels of productivity and various distortions may affect costs and prices. We establish the existence and uniqueness of an equilibrium and provide comparative static results on how prices and endogenous technology/input choices (and thus the production network) respond to changes in parameters. These results show that improvements in technology (or reductions in distortions) spread throughout the economy via input–output linkages and reduce all prices, and under reasonable restrictions on the menu of production technologies, also lead to a denser production network. Using a dynamic version of the model, we establish that the endogenous evolution of the production network could be a powerful force towards sustained economic growth. At the root of this result is the fact that the arrival of a few new products expands the set of technological possibilities of all existing industries by a large amount—that is, if there are n products, the arrival of one more new product increases the combinations of inputs that each existing product can use from 2 n−1 to 2 n , thus enabling significantly more pronounced cost reductions from choice of input combinations. These cost reductions then spread to other industries via lower input prices and incentivize them to also adopt additional inputs.

scholarly journals Supply Chain Disruptions: Evidence from the Great East Japan Earthquake*

2020 ◽  
Author(s):  
Vasco M Carvalho ◽  
Makoto Nirei ◽  
Yukiko U Saito ◽  
Alireza Tahbaz-Salehi
Keyword(s):  
Supply Chain ◽  
Great East Japan Earthquake ◽  
Gdp Growth ◽  
Production Networks ◽  
Input Output ◽  
Supply Chain Disruptions ◽  
Real Gdp ◽  
Propagation Effects ◽  
Macroeconomic Impact

Abstract Exploiting the exogenous and regional nature of the Great East Japan Earthquake of 2011, this paper provides a quantification of the role of input-output linkages as a mechanism for the propagation and amplification of shocks. We document that the disruption caused by the disaster propagated upstream and downstream along supply chains, affecting the direct and indirect suppliers and customers of disaster-stricken firms. Using a general equilibrium model of production networks, we then obtain an estimate for the overall macroeconomic impact of the disaster by taking these propagation effects into account. We find that the earthquake and its aftermaths resulted in a 0.47 percentage point decline in Japan’s real GDP growth in the year following the disaster.

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