I. The Purpose of the Study
The primary purpose of this study is to explore ways and means of collaborative regional development among the core economic regions of Northeast Asia. Even though collaborative regional development can be achieved by intergovernmental agreements, it is primarily mediated by market forces, which can be represented by enterprises, especially TNCs(transnational corporations). Borrowing the concept of global production networks, this study examines the potential role of TNCs in establishing complementary division of labor among regions. First, the study investigates Northeast Asian TNCs’ production networks and the resultant regional division of labor.
In order to manage the scope of investigation, the study selects electronics and automobile industries, which take a strategic position in international trade and investment of China, Japan and Korea. Since the electronics industry covers a variety of branches, this study included the three most important ones: LCD(liquid crystal display, cellular phones, and semiconductor). Second, the study focuses on China’s three coastal zones, the role played by the Asian NIEs and Japanese companies, and the resultant reconfiguration of inter regional relations between China’s coastal regions and Korean/Japanese core economic regions. Value chain concept is employed for the explanation of regional development in the context of regional production networks. By looking at value chains and the geographical transfer of values, this study hopes to gain insights about the reconfiguration of cross border regional division of labor.
II. Theoretical Considerations of Regional Development and Production Networks
Endogenous and exogenous factors count for regional development. Conventional theories of regional development emphasize more on endogenous factors, while recent concepts such as global production networks lean towards exogenous forces without dismissing policy efforts by local and national institutions. Global production networks (GPNs) can be simply defined as “the globally organized nexus of interconnected functions and operations by firms and non firm institutions through which goods and services are produced and distributed.’ These networks “not only integrate firms into structures which blur traditional organizational boundaries through the development of diverse forms of equity and non equity relationships, but also integrate regional and national economies in ways that have enormous implications for their developmental outcomes” (Coe et al 2004, p. 471).
In the perspective of global production networks, endogenous growth factors are not sufficient for regional development. The way that these endogenous growth potential is utilized by strategic needs of trans local actors coordinating global production networks is considered to be important. Thus, regional development is understood to be a dynamic outcome of the complex interaction between territorialized relational networks and global production networks within the context of changing regional governance structures. Such a conceptual framework emphasizes interactive complementarity and coupling effects between localized growth factors and the strategic needs of translocal actors in propelling regional development. Hence the concepts of ‘regional assets’ and ‘strategic coupling’ are employed to explain regional development. In particular, the GPN perspective pays attention to the existence of economies of scale and scope within specific regions, the possibility of localization economies within global production networks, and the appropriate configuration of regional institutions to hold down global production networks and unleash regional potential. (The rest is omitted)