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Global production sharing: Exploring Australia's competitive edge
Author(s) -
Athukorala Premachandra,
Talgaswatta Tala,
Majeed Omer
Publication year - 2017
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/twec.12495
Subject(s) - production (economics) , industrial organization , globalization , competitive advantage , economics , business , international trade , enhanced data rates for gsm evolution , commerce , economic geography , computer science , marketing , market economy , telecommunications , microeconomics
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 ( GPN s). Though Australia is a minor player in GPN s, 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 GPN s, 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.