CALL FOR PAPERS
Special Issue of Global Development Studies
THEME: Reshaping the Economic Geography of the Caribbean Region: Global Value Chains and Opportunities for Building Competitive Capabilities and New Forms of Specialization
Global Development Studies intends to publish a special issue focusing on the Caribbean region in fall 2013.
This issue will examine the impact of the spatial (geographic) transformation of global production in goods and services on the Caribbean region, assess the region's position in global value chains (GVCs) and the new opportunities and challenges associated with the location advantages and disadvantages of the region.
With increasingly less emphasis on size and proximity for new forms of specialization (intermediate goods and services), can the region's small market economies develop new competitive capabilities to benefit from the new forms of specialization?
Theoretically and contextually, the issue seeks to situate the spatial (geographic) transformation of global production and the reorganization of GVCs in the context of Caribbean economies (and wider communities) such as the business environment, labor force, human resources, education and skills requirements, and state and CSME responses. How is the CSME and Caribbean communities responding and adapting to the reorganization and impact of GVCs?
Summary of Main Issues in the Current Debate:
Global value chains (GVCs) have emerged as new sources of value, and they are changing the structure and pattern of global trade. Trade in intermediate goods acts as a proxy for global value chain production and currently comprises 60 percent of the total trade in goods.
The full impact and benefits of GVCs go well beyond global trade and trade policy implications to encompass the spatial (geographic) transformation of global production, the fragmentation and localization of production, the new requirements for economic transition, and new processes and requirements for regional and global economic integration.
1. Opportunities and Challenges Raised by the Spatial (Geographic) Transformation of Global Production:
The global fragmentation of production is currently engendering major changes and new assumptions relating to the relevance of size and proximity to major markets. These developments are also generating organizational changes and strategic dislocations as global firms (entrepreneurs) respond to the new logic of global competition.
Where do global firms locate (relocate), and why? Global firms are in search of new economic activities, which raises some conceptual, analytical and empirical questions relating to where companies locate and why? Why are some regions more attractive than others?
Global market integration: Despite the global fragmentation and localization of production, the process of globalization is reinforcing economic concentration and regionally concentrated production trends. Therefore, spatial economic concentration remains beneficial for production while increasing specialization, scale economies and efficiency in specific regions.
While greater specialization and geographic concentration pose new challenges for developing economies, they can also benefit from the opportunities generated by new processes of regional and global economic integration.
2. Exploiting New Linkages to "Trigger" Development Processes: New Debate on Economic Transition in Developing Economies:
The spatial transformation of global production is providing new opportunities for developing economies to bypass the traditional stages of manufacturing and (Industrialization).
Spatial Transformation: Geographic Barriers and Economic Impediments:
The requirements for effective integration and participation in the GVCs are engendering structural changes in the composition and patterns of trade, with a major shift from the production and export of raw materials and commodities to intermediate goods and services
Economic Determinants: access to natural resources and factor endowment have been the main factors "triggering" the development of global value chains in developing economies.
Location Economies: low cost locations have also resulted in global value chains in selected labor-intensive industries in developing economies.
Geography and Location Competitive Advantage: Developing economies are now forced to look beyond traditional development strategies and trade policies -- beyond commodity-based exports
Other Challenges:
• Developing economies must undertake economic diversification and transition in a global economy where greater specialization and geographic concentration are even more challenging
• Most developing and emerging economies face the challenge of entering and upgrading their positions within global value chains.
• They must overcome the limitations of geographical barriers and develop trade and transport links (networks) with markets and sources of investment in industrial and emerging economies
• How is falling transportation costs making specialization possible? The major beneficiaries are regions with the greatest reductions in transport costs
• High transport costs and small markets do not support new forms of specialization
• What are the main factors limiting new forms of specialization in developing economies?
Opportunities and Challenges for the Caribbean Region:
Can the region develop competitive capabilities for new forms of specialization (intra-industry trade, component specialization and intermediate inputs)?
New Opportunities in Services Value Chains:
Beyond the fragmentation and localization of global production, there are demands for new forms of specialization in global services value chains. Global firms are developing new forms (processes) of economic integration, access to efficient services and competitive services markets to facilitate integration into global supply chains, new global supply networks, and the outsourcing of specific tasks and responses to consumer demands
1. Overcoming Geographic Barriers: hindrance to trade diversification and new forms of specialization include factor endowments, size, physical infrastructure, high transportation costs, and high labor costs
2. Impact of changing transportation cost: Location advantages or disadvantages in the wake of the communication and transportation revolutions
3. New assumptions suggesting that economies of scale and internal efficiency are more important than size and proximity
4. Caribbean Business Environment: Economic policy, human and institutional capabilities, regulatory regimes and coordination of regulatory standards.
• Location Economies: Proximity to large markets
• Transportation and communication networks: impact on the cost of doing business
The Caribbean Single Market Economy:
Global value chains are changing the major assumptions relating to regional and global integration and the requirements for new processes of deeper economic integration in response to the structural changes relating to the reorganization of GVCs.
Can the region address the following new challenges?
• With increased emphasis on market access and less preferential arrangements, developing economies are forced to design new forms of regional integration and preferential arrangements in order to facilitate greater integration in global value chains
• Can the integration process lead to the development of new forms of economic specialization, economies of scale and internal efficiency?
• Will "deeper" regional integration provide market access for smaller economies and more access to global markets?
• New forms of economic specialization are required to facilitate regional coordination and cooperation among countries undefined including common standards and regulation
1. Geography and Location Competitive Advantage: Global Production Fragmentation and the Development of Spatial Division of Value Chains
Global fragmentation refers to the "splitting" of a production process into two or more steps that can be undertaken in different locations but leading to the same final product (vertical specialization: cooperation between upstream and downstream firms).
Localization reflects the increasing share of value added activities along a supply chain that is produced at the national or local level.
Production in one or different geographical (locations) is now (can be) divided into different tasks (specialization in different countries). Some production processes can be located in specific geographic regions based on location competitive advantage
Strategic Dislocation of Global Firms: Changes in the Competitive Positions of National Economies and Different Regions
Global value chains (GVCs) have transformed (and continue to transform) the structure of global production activities, including the relocation of GVCs. In this context, intermediate goods production and export are a direct consequence of the expansion of global supply chains
The fragmentation and localization of GVCs (GVCs dislocation) are due to the organizational changes and strategic decisions of transnational firms in response to the new logic of global competition. Global firms are forced to evaluate their strategies and redefine the boundaries of competition in response to the major shifts in value along the global supply chain.
Global Position Rationalization reflects the development of complex production processes which can be located in different countries and the extent to which current the competitive positions of national economies (regions) are shaped by GVCs. National economies and global firms must now respond to complex and specific requirements for product differentiation and specialization: they must develop new forms of competitive capabilities (largely for intermediate inputs).
1.1. Impact of Spatial (Geographic) Transformation: Relevance of Proximity and Size and Distance:
The ongoing spatial transformation of the global economy is changing some of the dominant assumptions relating to the relevance of proximity, size and distance in global economic activities.
As global production fragmentation and strategic dislocation intensify the search for new locations, three major developments are now influencing the dominant assumptions relating to proximity and market size:
(a) The relevance of proximity and size for intermediate goods production; (b) the impact of declining transportation and communications costs on proximity; and (c) the growing evidence suggesting that production costs and efficiency matter more than proximity.
The implications of these developments are critical for most developing and emerging economies, and particularly for the small market economies in the Caribbean region.
Main Research Questions and Conceptual Issues:
• What aspects of geography matter for location, and to what extent do they matter?
• Why are some regions more attractive than others?
• Why do producers favor certain countries and regions?
• When size matters less than internal economies of scale, function and efficiency, the increasing returns to scale of global firms facilitate the exploitation of economies of scale
• Why is proximity less important, particularly for intermediate goods production?
There is less emphasis on size and proximity for new forms of specialization (intermediate goods and services)
• Declining transport and communications costs have made proximity less important.
Impact of declining or rising trade costs: how do high or low trade costs facilitate production relocation?
• Trade sensitivity to transport costs: trade in intermediate inputs is more sensitive to transport costs than trade in final goods
• When size matters and when small economies are at a disadvantage
• Generating economies of scale: how can small locations (economies) generate economies of scale?
• Do small markets support new forms of specialization?
• What are the benefits of proximity to suppliers and consumers
1.2. Spatial Economic Concentration (Convergence) and the Amplification of Spatial Disparities:
Competitive Asymmetry and Widening Regional Disparities:
The intensification of economic concentration: economic activities and purchasing power are increasingly concentrated in few regions. Distance helps to characterize the spatial transformation accompanying economic development and may be necessary for rapid economic growth
Production is becoming more spatially concentrated with increased economic growth, and there is a widening regional disparity (gap) accompanying the increased spatial (geographic) concentration. In this context, there is increasingly spatial concentration of competitive suppliers.
Developing economies must respond and adapt to a global economy where greater specialization and geographic concentration are more challenging
Economic Concentration: Evidence of the Benefits of Economic Concentration:
Importance of Market Size: How are scale economies forcing larger production units?
Industrial agglomeration, scale economies and lower transportation costs are resulting in larger production units and increased economic concentration. Increasingly, there are benefits in locating production activities close to each other (clusters) and in large regional markets.
Main Research Questions and Conceptual Issues:
• Why does the concentration of economic activities increase across geographic regions?
• What are the main factors influencing the geographic distribution of economic activities?
• Geographic Concentration: Where will economic activities locate, and why?
• Production becomes more concentrated spatially with increased economic growth, economic production and the convergence of standards of living.
• What are the conditions under which economic growth (new activities) may leap to entirely new geographic regions?
• Regional concentration and beneficiaries of reductions in transportation costs
• Increased market potentials in leading areas of developing and emerging economies undefined due to larger global markets, better transportation and improved communications technologies undefined have intensified economic concentration and amplified economic disparities.
Incentives for Geographic Concentration of Production:
• Interaction between economies of scale, transportation cost and market size
• Increasing returns to scale
• Location decisions of producers determine the location of large markets
• Transportation costs incentive to locate plants close to large markets
2. New Drivers of Regional Economic Integration: New Forms (Processes) for Integration into the Global Economy
Economic Integration and the Benefits of Production Concentration and Localization:
Conceptual Issues:
Global value chains are changing the assumptions relating to regional and global integration and the requirements for new processes of deeper economic integration in response to the structural changes engendered by GVCs.
Global value chains are also generating wider cooperation and effective integration at the regional and global levels, resulting in greater regional concentration of economic activities and the amplification of regional disparities.
The high level of import intensity in export production has created (and continues to create) deeper levels of economic integration among countries engaged in global supply chains.
• With increased emphasis on market access and less preferential arrangements, developing economies are forced to design new forms of regional integration and preferential arrangements in order to facilitate greater integration in global value chains
• Greater integration of regional and global markets is generating new forms of economic concentration and specialization. This development provides new opportunities for developing and emerging economies in the GVCs.
• New forms of economic specialization are required to facilitate regional coordination and cooperation among countries undefined including common standards and regulation
3. Beyond Market Access, Falling Trade Costs and Trade Liberalization
Export performance and business competitiveness have become increasingly dependent on the openness of countries to imports and participation in global value chains.
Trade Costs for Intermediate Goods: Both high and low intermediate trade costs encourage the re-location of global production and the capacity to supply markets and consumers from a distance. When trade costs decline sufficiently, some activities will be re-located in response to cost differences and others will remain concentrated.
Trade sensitivity to transport costs: trade in intermediate inputs is more sensitive to transport costs than trade in final goods
Global Value Chain Relocation: Importance of Imports for Exports -- Increased use of Intermediate Imports in Exports
Trade Liberalization, non-preferential MFN tariffs and nominal tariffs, are historically at their lowest levels. Tariffs have also diminished in significance as a trade policy instrument, and they are no longer the main motive for preferential trade agreements. The main impetus of preferential agreements is to facilitate and support global value chains.
The cumulative impact of tariffs when intermediate goods are produced and traded several times across borders have raised the issue of the effects of tariffs on GVCs location and relocation.
Market Access: market access is invariably viewed as a "reciprocal concession" in both regional and multilateral trade agreements. However, with the growing importance of imports for exports, are tariffs and other barriers to imports now counterproductive to a country's exports?
Domestic firms now benefit from exports that rely on trade liberalization and access to reliable sources of imports of goods and services to facilitate increased productivity and competitiveness.
Additionally, trade barriers to the import of intermediate inputs increase the cost of domestic production and reduce the capacity of the country to compete in export markets.
Research Questions and Conceptual Issues:
• Measuring trade in intermediate imports: why are the lines between imports and exports increasingly blurred?
• Assessing the high level of import intensity in both intermediate goods and exports
Imports matter as much as exports: why imports are now essential to exports?
• How do trade liberalization (falling trade barriers) and increasing market access affect changes in industrial location?
• How do changing trade barriers affect the relative advantages of different locations?
• Identifying new methods of measuring global trade in terms of value added
• Imports matter as much as exports: why are imports now essential for exports?
• How trade in value added challenges statistical concepts (methodology) and the formulation of trade policy issues?
4. The Geography of Value Chain Location:
The full impact and benefits of GVCs on the global economy go well beyond global trade and trade policy implications to encompass the spatial (geographic) transformation of global production, the fragmentation and localization of production, the new requirements for economic transition, and new processes and requirements for regional and global economic integration.
Main Research Questions and Conceptual Issues:
• Companies (firms) seek to acquire new capabilities, and there is increased competition among several value chains
• Competition is no longer limited to the sphere of the enterprise/firm undefined entire value chains are starting to act as major entities and competing against each other for similar markets.
• Production in one or different geographical (locations) is now divided into different tasks (specialization in different countries)
• Certain production processes can be located in specific geographic regions based on location competitive advantage
• Identifying the main drivers of global value chain location and geographic relocation
• How do global value chains facilitate a new model of economic transition?
• How do global value chains affect employment, growth and regional integration?
• The contribution of GVCs to the final value of products
• Understanding how GVCs have transformed the structure of global production activities
• The cost structure underlying and driving value chain location, and how they could change dramatically
4.1. Dimensions of Global Value Chains: Production, Manufacturing and Service Value Chains
1. Value Chains in Goods:
Advances in telecommunication and information technology undefined allowing for segmentation of production into units that can be dispersed geographically and yet be controlled
2. Value Chains in Services: Services are "Enablers" of Value Chains in Goods
Services inputs and "links" at each point of the value chain undefined critical links relating to transport, telecommunications, logistics, distribution, marketing and R&D. Logistic Performance: transport, warehousing, border clearance and payment systems
4.2. Global Business Services Activities: Opportunities in Services Across Production Sectors
Services Value Chains: How Do Services Value Chains Function?
There are new and significant opportunities associated with the development of services value chains. Services are being disaggregated and traded as separate "tasks," and they are creating their own value chains. Services firms have in the last two decades increased their demands for forms of specialization in value chain processes such as outsourcing of non-core functions by core capabilities, particularly services in wide sector network, knowledge processing outsourcing and business processing.
Additional opportunities relate to:
• Developing new forms (processes) of economic integration: access to efficient services and developing competitive services markets to facilitate integration into global supply chains
• Communication and transportation revolution: reduced costs have resulted in the fragmentation of services into components supplied to consumers from different parts of the world (services sector specialization and component specialization)
• Developing Economies: building strong supply capabilities in response to market demands
• Structure of Global Value Chains: import of services -- now constituting a large share of the value of global trade
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CARIBBEAN REGION: Global Value Chains and the Caribbean Competitive Environment:
Opportunities and Challenges for Building Competitive Capabilities and New Forms of Specialization for Integration into Global Value Chains
Suggested Topics and Areas:
• Special consideration will be given to contributions focusing on the issues and areas identified below.
• We welcome specific case studies of GVCs (reorganization of GVCs) in the Caribbean region
1. Caribbean Competitiveness and the Cost of Doing Business in the Caribbean Region:
Challenges: Geographic Barriers and other Impediments Common among Small Island States:
• Physical Limitations: Vulnerability to severe weather
• High transportation and communication costs
• Lack of economies of scale
• Isolated Economies (Extent of integration into the global economy)
2. The Caribbean Business and Economic Environment:
• Cost and ease of doing business in the Caribbean: key indicators to measure regional performance
• Domestic and Regional Constraints: Infrastructure and logistics support for value creating activities
• Responding to the need for competitive locations for specific tasks (New Forms of Specialization)
• Developing flexible and innovative business environment with skilled workforce
• Developing a favorable institutional framework to facilitate effective integration into GVCs
• Domestic and regional capacity building to facilitate new forms of specialization and competitive environment
• Macro-economic Conditions: designing complementary policies for domestic and regional coordination
• Institutional challenges for policy makers
3. Caribbean Production Localization: Developing Export-oriented Localization:
• Caribbean economies and external economies of scale at the national level
• Developing industrial clusters
• Developing external economies embedded in a wider trading system
• Forms of cooperation and types of global value chains
• Assessment: how local and independent suppliers can develop links with global sourcing partners, or upgrade their capabilities to meet global standards regime.
4. Developing Internal Scale Economies, Functions and Efficiency:
• Developing production clusters in North, Central and South America:
Importance of proximity and remoteness to innovation and production clusters
• Cost and ease of doing business in the Caribbean: key indicators to measure regional performance
• Caribbean location advantages (disadvantages) in the wake of the transportation and communication revolution
• Forms of Specialization: Regional coordination and cooperation among countries undefined including common standards and regulations
• Capacity building for new forms of specialization
• Falling Transportation Costs: Opportunities for new forms of specialization
• Falling Transportation Costs: Impact on trade composition and sensitivity (more sensitive) to changes in transport costs
• Competitive Capabilities: Assess the Logistical Performance Index of the region
• Institutional challenges for policy makers
5. Competitive Capabilities for New Forms of Specialization:
• Opportunities for the creation of services value chains in the Caribbean region
• Critical factors in the creation of services value chains
• Factors influencing the level of value-added location (Decisions of services firm relating to location and outsourcing location)
Caribbean Sourcing Structures and Supply Markets: Analysis of Sourcing Structure
New Opportunities: Cluster of Competitive Suppliers in the Global Value Chains
• Developing cluster-based firms in the region: Sourcing products from regional network of suppliers rather than an integrated company
• Making Value for Customers: Understanding the value that consumers receive from products and identifying and understanding customers who anticipate international trends (demand articulation)
• Customer Satisfaction: Responding to customers and identifying the advantages for customers
• Value for Services: increasing the value of existing products
• Developing integrated system of understanding customers, R&D, design, manufacturing, and the delivery of products and services
• Leveraging the Information Age: how is information collected, analyzed and distributed?
• Developing specialized suppliers and how domestic suppliers can become "first tier" suppliers in global value chains
• Integrating domestic suppliers in global value chains
6. Caribbean Investment Climate:
• Government policies to facilitate the development of domestic business linkages
• Developing a new regime for trans-Caribbean (Caribbean wide) investment
• Caribbean investment code to attract firms aimed at facilitating greater integration in global value chains
• The Caribbean region as a single investment "jurisdiction"
• Attracting investments aimed at developing regional production networks and linkages with local firms
• Targeting FDI through promotion measures to strengthen local supply capacities
• Developing a regional standards regime: Ensuring compliance with new standards
7. Caribbean Region (Geographic Dispersal of FDI Flows): FDI Flows to facilitate integration into global value chains:
• Attracting FDI flows to facilitate global vertical specialization
• Attracting FDI Flows to facilitate intermediate content imports
• Flows of imports across national borders to facilitate further processing and final assembly
• FDI flows in services as a composition of total FDI flows
Attracting FDI through promotion measures to strengthen local supply capacities
• Standards and Adaptation: Role of FDI in technological upgrade to meet international standards
• TNCs as lead buyers (M/A) of local firms in the GVCs: Role of TNCs in dictating overall direction of both product and process innovations
8. Caribbean Single Market Economy (CSME): Economic Integration:
1. Assessment: Developing the region's competitive capabilities and new forms of specialization
2. Main Indicators of Economic and Production Integration:
• Key Indicators: Trade Facilitation, Trade Cost Impediment, Transport Connectivity, Transport Cost,
• Harmonization of Standards, Transit Issues and the Harmonization of Documents, Transport Infrastructure
• Intra-Caribbean shares in total trade in goods and services
• Total cross border investment flows
• Growth in the number of cross-border investment flows
• Growth in extra-regional exports by Pan Caribbean firms
3. New Drivers of Regional Integration
• Developing regional production networks
• Role of GVCs in deepening integration provisions
• Need for coordination and efficient links between production stages across countries
4. Instruments of Deeper and Effective Integration:
• Institutions, policy interventions and physical infrastructure
• Investments and associated rules and regulations
5. Regional Approach to Market Access:
• Policies that restrict access to foreign intermediate goods and services have a detrimental impact on a country's position in regional and global supply chains
• Designing regional agreements for GVCs membership to promote the expansion of GVCs
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Instructions for Potential Contributors and Projected Publication Schedule:
Submission of Abstracts: Interested contributors should submit their abstracts of no more than 200 words to the managing editor no later than May 31, 2013. In addition to the proposed title, each abstract should include the objectives and organization of the study and the conceptual framework.
Submission Deadline for the First Draft of Each Article: The first draft of each article should be submitted for external review no later than August 31, 2013. Two anonymous readers will review each article submitted. Contributors should submit two hard copies and one electronic copy of their manuscripts in Microsoft Word.
Submission Deadline for Final Drafts of All Articles: Final Drafts of all articles selected for publication should be submitted electronically no later than October 31, 2013
Projected Publication Date: December 15, 2013
Mailing Address:
Managing Editor, Global Development Studies
C/O International Development Options
912 Falcon Drive, Largo, MD 20774
United States of America
E-mail: idoresearch@att.net
Tel: 301-350-3910
Fax: 301-350-1056
