Comment on “Joining Global Production Networks: Experience and Prospects of India”

• Author: Fukunari Kimura
• DOI: http://doi.org/10.1111/aepr.12250
• Date: 01 January 2019
• Published date: 01 January 2019

Comment on “Joining Global Production

Networks: Experience and Prospects of India”

Fukunari KIMURA

1,2

†

1

Keio University and

2

Economic Research Institute for ASEAN and East Asia (ERIA)

JEL codes: F13, F21, F23

Accepted: 26 July 2018

The study of Athukorala (2018) successfully shows that India lagged behi nd in the wave of

explosive increases in trade in global production networks (GPNs) in the last three decades,

particularly in electronics and electrical goods. Although Athukorala’s paper includes noth-

ing technical in showing statistical data, the main message is vividly presented with a series

of insightful anecdotes for cases in other Asian countries. Athukorala’s research experience

on the topic, accumulated over a long time, makes his paper rich and persuasive.

One of the important contributions of Athukorala’s paper is to apply a novel com-

modity classification, buyer-driven and producer-driven, for production sharing or

production networks. This is an interesting trial. I share Athukorala’s concern that the

concept of global value chains (GVCs), often used with the trade in value-added data,

corresponds to all sorts of international industrial linkages including even the trade in

natural resources and raw materials, and is thus too wide to represent production net-

works. We must investigate the nature of GVCs much more carefully. Athukorala

claims that buyer-driven production networks include SITC 83 (travel goods),

84 (clothing...), 85 (footwear), and 894 (toys and sport goods), while producer-driven

production networks consist of SITC 75 (office machines ...), 76 (telecomm. and sound

recording equip.), 77 (electrical mach.), 78 (road vehicles), 79 (other transp. eq.),

87 (prof. and scientific eq.), and 88 (photographic app.).

These roughly correspond to the first and second unbundlings that Baldwin (2016)

proposes though they are not exactly identical. In particular, the representative industries

for the first unbundling also include plantation agriculture, and the mining industry.

However, the concept of producer-driven production networks and the second unbund-

ling share special characteristics of fast, sophisticated, and time-sensitive production net-

works. Only a small number of countries have so far achieved the appropriate economic

and policy environment, and have been successful in initiating producer-driven produc-

tion networks. To identify what needs to be prepared for and what is missing for sophis-

ticated production networks, it is crucial to highlight producer-driven links.

Beyond Athukorala’s paper, more in-depth data analysis is certainly possible. One

of the recent innovations in examining international trade data is the analysis of

†Correspondence: Fukunari Kimura, Faculty of Economics, Keio University, 2-15-45 Mita,

Minato-ku, Tokyo 108-8345, Japan. Email: fkimura@econ.keio.ac.jp

146 © 2018 Japan Center for Economic Research

doi: 10.1111/aepr.12250 Asian Economic Policy Review (2019) 14, 146–147