‘Globalizing’ regional development: a global production networks perspective

TLDR

Recent regional‑development studies emphasize local institutions, whereas global‑production‑network research stresses the influence of transnational firms’ organizational structures on industrial upgrading. This paper conceptualizes how the globalizing processes embedded in transnational corporations’ production networks connect to regional development within specific territorial formations. The authors define a strategic coupling between global production networks and regional economies, illustrated by BMW’s investments in Eastern Bavaria and Rayong, Thailand, showing how such coupling drives development through value creation, enhancement, and capture. The study stresses that regional development is multi‑scalar, with no single geographical scale dominating the underlying forces and processes.

Abstract

Recent literature concerning regional development has placed significant emphasis on local institutional structures and their capacity to ‘hold down’ the global. Conversely, work on inter‐firm networks – such as the global commodity chain approach – has highlighted the significance of the organizational structures of global firms’ production systems and their relation to industrial upgrading. In this paper, drawing upon a global production networks perspective, we conceptualize the connections between ‘globalizing’ processes, as embodied in the production networks of transnational corporations, and regional development in specific territorial formations. We delimit the ‘strategic coupling’ of the global production networks of firms and regional economies which ultimately drives regional development through the processes of value creation, enhancement and capture. In doing so, we stress the multi‐scalarity of the forces and processes underlying regional development, and thus do not privilege one particular geographical scale. By way of illustration, we introduce an example drawn from recent research into global production networks in East Asia and Europe. The example profiles the investments of car manufacturer BMW in Eastern Bavaria, Germany and Rayong, Thailand, and considers their implications for regional development.