Spatial re-localisation in global production networks: a path creation perspective of Solar Panel Industry in Malaysia

Dr. VGR Chandran Govindaraju, University of Malaya

This paper aims to provide insights on the spatial re-localisation within the global production networks (GPN) in the solar panel industry. In doing so, the paper combines the GPN, Global Value Chain (GVC) and path creation perspective in analysing the MNCs relocation in Malaysia using interviews and trade data. The findings draw attention to a few important issues which deserve greater consideration in contributing to the theoretical discussion within the GPN literatures. It shows that path creation occurs at both levels - institutions and at a firm’s strategic decision level. First, we showed that an institutional path creation is instrumental in promoting the completeness of the entire GVC in Malaysia, via the active state intervention, creating new paths by learning from the past experience (loosely path dependent) of the electronics industry. Nevertheless, this path creation is also limited in that it is only instrumental in coordinating windows of investment and trade opportunities within the different segments of the GVC without much help in promoting technological learning and spill over from the GVC participations. Second, the success of the institutional path creation is subjected to dynamic coordination between agencies - wider array of actors and multiscalar institutional contexts. We find various institutional factors limiting the promotion of local spill overs – e.g. export oriented industrialisation strategies, trade, and energy as well as competition policies. Likewise, depending on the nature of institutional path creation, it has different causal effect on the firm’s path creation leading to different strategic decisions. The firm’s intensity of path creation differs greatly among the actors within the GVC segments enforcing the heterogeneity nature of the industry. It differs based on ownership and other firm characteristics. As a whole, the study shows the complexity of the institutional path creation within the GPN framework moving beyond the firm centric path creation perspective in examining the industrial path development in a developing country.

About the speaker

VGR Chandran is an Associate Professor in Industrial Development at the Department of Development Studies, Faculty of Economics and Administration, University of Malaya and is the visiting researcher at UNU-MERIT under the Catchain project funded by the European Commission’ Marie Sk?odowska-Curie Research and Innovation Staff Exchange. He has also worked as Principal Analyst of Economic and Policy Studies with Malaysian Industry-Government Group for High Technology (MIGHT), Prime Minister’s Department, Malaysia. He holds a PhD in Economics and his research interests are mainly on innovation, technology development, trade and globalization. His field research covers sectors such as electrical and electronics, automotive, food, chemical, oil palm, machinery, iron and steel, ICT, and the newly emerging sector - renewable energy.

Venue: 0.16/0.17

Date: 03 October 2019

Time: 12:00 - 13:00  CET