Integrating Finance into Global Production Networks

TLDR

The global production network (GPN) framework has largely overlooked finance, despite finance’s greater global reach and networked nature, creating a significant gap in understanding regional development dynamics. The paper aims to integrate finance into GPN research by developing the concept of a global financial network (GFN). It does so by drawing on financial geography, emphasizing advanced business services, world cities, and offshore jurisdictions as core elements. The study argues that incorporating finance into GPN research enriches the framework conceptually and provides new methodological and empirical opportunities.

Abstract

Coe N. M., Lai K. P. Y. and Wójcik D. Integrating finance into global production networks, Regional Studies. While successful in its aim of 'globalizing' regional development, the global production network (GPN) approach has thus far paid less attention to the role of finance in the dynamics of the global economy and regional development. This lacuna is significant as finance is arguably even more globalized and networked than production. To address this gap the paper distils the concept of the global financial network (GFN) from financial geography and related scholarship, with advanced business services, world cities and offshore jurisdictions at the core. Interactions between the GPN and the GFN are discussed, focusing on the financing and financializing of GPNs and the co-evolution of globalization and financialization. Integrating finance into GPN research entails more than a simple extension of the approach; it would also enrich it conceptually, and enable it methodologically and empirically.