The Nature and Characteristics of
Production Networks in East Asia:
Evidences from Micro/Panel Data Analyses

Fukunari Kimura

December 2009


Production networks in East Asia, particularly being extended by machinery industries, have presented unprecedented development with their significance in economies in the region, their geographical extension, and their sophistication in combining intra-firm and arm's length transactions. In particular, the fragmentation of production activities together with the formation of industrial agglomerations in developing countries is a novel phenomenon that would lead to an East Asian model of economic development. Starting from a brief review of our conceptual framework based on the fragmentation theory as well as an empirical overview with international trade statistics and others, the paper presents a survey on empirical evidences that have been established by previous micro-data analyses in East Asia and discusses a list of empirical issues that future studies should explore. Topics include (i) the selection of exporters and investors, (ii) organizational structure and spatial design of production networks, (iii) location choice, (iv) impacts of outward FDI on developed countries, and (v) learning and impacts of inward FDI on LDCs.

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