Global Production Networks and Global Financial Networks

Question 1

What are clusters? (?;?)

Answer 1

Porter 1990
Localised groups of interconnected firms and associated institutions in a given sector
e.g. IT industry Silicon Valley
Four elements:
- firm rivalry
- related and supporting industries
- factor conditions = inputs e.g. skilled HR and scientific base
- demand conditions = pressure innovation
[role of gov = regulate to ensure high standards and competition]

Question 2

Rugman/Dunning Hypothesis [?]

Answer 2

1997
= competitive advantage not only from domestic environment - integration of world economy
1993 survey of 144/500 top global companies - 40-50% competitive advantage came from presence in foreign countries
- FDI or strategic alliances

Question 3

Inside the GPN (?;?)

Answer 3

Coe et al 2004
Lead TNCs bargain with regional institutions
Regional institutions policies e.g. education and infrastructure create regional assets e.g. land, people, capital, tech
Strategic coupling of lead TNCs and regional assets
= regional development
& value capture - tax, skills, infrastructure

Question 4

Different types of infrastructure investment [?;?]

Answer 4

Boschma 2006
Incremental = fine-tuning, strengthening existing connectivity
= less uncertainty
Transformative = restructuring institutional framework, stimulating new connections/diversity

TNCs have less loyalty to places = prepare for decoupling and GPN of different sector

Question 5

GPN 2.0 (?;?)

Answer 5

Coe and Yeung 2015
GPN thinking to explain patterns of uneven territorial development
highly differentiated geographies of manufacturing and service provision = divergent growth and developmental trajectories

Question 6

Case Study: The City of London (?;?)

Answer 6

Amin and Thrift 1992
Originally – small financial service firms, social and spatial proximity
Post-1960: larger firms, ICT = communication @ a distance, centre of global financial sector networks, through-flow of international workers
= shift from networks of clusters to networks of TNC operations
= self-sustaining growth an illusion - succeed by becoming important nodes in networks

Question 7

Geography of finance

Answer 7

Financial centres; the world; offshore jurisdictions
- trading and control concentrated in financial centres
- financial vehicles (groups of financial instruments) are registered in offshore jurisdictions due to lower laws and regulations and taxes and higher secrecy
Connected by financial and business services - finance, law and accounting

Question 8

GFNs (?;?)

Answer 8

Wójcik 2016
networks of financial and business services firms and their activities linking financial centres, offshore jurisdictions and the rest of the world

Question 9

Why are financial firms so important? (?;?)

Answer 9

Vitali et al 2011
nearly 40% of value of all international companies is in hands of 140 companies = the super core of the GPN
3/4 are banks
huge control over rest of world economy

Question 10

Offshore jurisdictions (?;?)

Answer 10

Wójcik 2012
advanced business services linked to them
feature prominently in recent global financial crisis - operating through OJs to securitise most risky FVs e.g. Northern Rock used Granite, a trust registered in Jersey, to securitise most risky UK mortgages and invest in US subprime mortgage instruments
Taxation - affects equity –> lower corporate tax and higher labour tax - less mobile than firms