Global production sharing: Exploring Australia's competitive edge. (15th May 2017)

• Record Type: Journal Article
• Authors: Athukorala, Prema‐chandra; Talgaswatta, Tala; Majeed, Omer
• Is Part Of: World economy. Volume 40:Number 10(2017)
• Page Start: 2172
• Page End: 2192
• Publication Date: 2017-05-15
• Subjects: Australian manufacturing -- global production networks -- global production sharing -- gravity model; International economic relations -- Periodicals; 330
• DOI: 10.1111/twec.12495
• Languages: English
• ISSNs: 0378-5920

Abstract

Abstract: Cross‐border dispersion of production processes within vertically integrated global industries ("global production sharing") has been an increasingly important structural feature of economic globalisation in the recent decades. This paper examines patterns and determinants of global production sharing with an emphasis on how Australian manufacturing fits into global production networks (GPNs). Though Australia is a minor player in GPNs, there is evidence that Australian manufacturing has a distinct competitive edge in specialised, skill‐intensive tasks in several industries such as aircraft, medical devices, machine tools, measuring and scientific equipment and photographic equipment. Specialisation in high‐value‐to‐weight components and final goods within GPNs, which are suitable for air transport, helps Australian manufacturing to overcome the "tyranny of distance" in world trade. Being predominantly "relationship specific, " Australian GPN exports are not significantly susceptible to real exchange rate appreciation.