Competitive Adjustment and Advancement in Global Commodity Chains: I. Firm Strategies and Trajectories in the East Asian Apparel Industry

Abstract

Globalisation discourses increasingly depart from a network-centred view of the world, and focus on the possibilities of leveraging economic globalisation -through incorporation in international production networks and global commodity chains (GCCs) -as a strategy for less developed countries (LDCs) to industrialise and advance their position in the world economy. This article goes beyond the question of incorporation and addresses the issue of sustaining positions, upgrading to more rewarding roles, and advancing to less dependent positions within production networks and GCCs. Drawing on experiences in the East Asian apparel industry, we present a framework for analysing such processes at both the firm and industry levels. We demonstrate that the East Asian experience provides a rather positive picture, despite a decline in the region's share of world trade. The present paper is a preliminary contribution; further research, using the framework presented, would enhance insights into competitive adjustment and advancement in GCCs, specifically, the forces underlying success or failure.

The price and income elasticities of the top clothing exporters: Evidence from a panel data analysis

“…At the end of the 1990s, Hong Kong lost its importance in production and became instead a regional trading and sourcing hub, bringing together buyers, sellers and input suppliers (Van Grunsven & Smakman, 2001). In fact, the emergence of China as a leading exporter led to a new specialization model (Bair & Gereffi, 2003), whereby leading retailers and branders in more advanced economies (such as the USA) retain direct control over design, marketing and retailing, and fix product standards for manufacturing suppliers operating in less developed economies (Gereffi, 1994(Gereffi, , 1999.…”

“…With regard to the other Asian exporters, Hong Kong and India's price elasticities show the same trend, although less pronounced, but unlike China, their increase is accompanied by a large fall in income elasticities and market shares. More specifically, it is worth noting that, around the end of the last century, Hong Kong modified its industrial organization from direct production to regional trading becoming a sourcing hub (Van Grunsven & Smakman, 2001). In the case of India, on the other hand, this is probably the consequence of a structural change in product specialization towards other sectors.…”

Globalization and Regional Change in the U.S. Furniture Industry

“…While upgrading can be associated with the development of regional assets, it can also result from learning that occurs within global production networks (the learning “pipelines” described by Bathelt, Malmberg, and Maskell 2004). Sacchetti and Sugden (2003) argue that globalization has promoted the development of long‐term, collaborative subcontracting relationships that give lead firms a considerable degree of control over supply chain logistics and product quality, while at the same time providing subcontractors with valuable technological, managerial, and skills‐related expertise that can allow them to develop their own subcontracting and distribution networks (van Grunsven and Smakman 2001). Tokatli and Kizilgun (2004) argue that firms in peripheral regions—in their case, a clothing manufacturer in Turkey—have “room for autonomous action” in upgrading and exporting their own brands.…”

“…A region may also experience production downgrading (plant closings, disinvestment) and consequently face severe job losses. This can result from the extensive outsourcing associated with functional upgrading, or industry decline (van Grunsven and Smakman 2001).…”

Competitive Adjustment and Advancement in Global Commodity Chains II: The Case of the Singapore Garment Industry

“…part of our contribution (Grunsven & Smakman, 2001), we explored these issues by taking a closer look at the development of the apparel industry in East Asia. Drawing on the East Asian experience, we developed an analytical framework relating to sustaining and advancing positions and roles in international production networks and GCCs at both the firm and industry levels.…”