Boundaries of firms and catching up by latecomers in global production networks : the case of a Mexican auto-parts manufacturer

For manufacturing firms in developing countries, there are high barriers to entry and to catching up with competitors in their global production networks (GPNs). This paper examines the case of a Mexican auto-parts manufacturer that succeeded in catching up in the automotive GPN. The author proposes that the door to GPNs is open thanks to frequent changes in the boundaries of firms, and also stresses the importance of the necessary conditions that generate opportunities, including institutional settings that facilitate market entry and catching up, and capability building by firms hopeful of entry.

Does technological progress magnify regional disparities?

We study how technological progress in manufacturing and transportation to-gether with migration costs interact to shape the space-economy. Rising labor productivity in the manufacturing sector fosters the agglomeration of activities, whereas falling transport costs associated with technological and organizational in-novations fosters their dispersion. Since these two forces have been at work for a long time, the final outcome must depend on how drops in the costs of producing and trading goods interact with the various costs borne by migrants. Finally, when labor is heterogeneous, the most efficient workers of the less productive region are the first to move to the more productive region.