Source: Navarro, P. (2006) Report of “The China Price Project”, Merage School of Business, University of California-Irvine. Through the 2000s, among manufacturers, the “China Price” became known as a frame of reference that could be 50% lower than other competitors. Although lower wages in China were an important factor behind
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Disconnection of Global Production and Distribution
Corporations constantly make decisions about the organization and allocation of their assets, such as manufacturing facilities. Conventionally, a corporation built supply chains with its assets and positioned them with cost and market access considerations. Globalization, particularly its outsourcing and offshoring component, has incited a growing disconnection between the manufacturing base
The Corporation and its Expansion
Globalization has favored a variety of expansion strategies for corporations, through which many became multinationals. The most common are: Vertical integration. The practice of either expanding backward or forward along the supply chain by acquiring (or merging with) suppliers or customers. This can result in many positive outcomes for a
Global Financial Centers, 2021
Source: Z/Yen Group, Global Financial Centers Index, 2021.Note: The index considers five major factors; human resources, the business environment, market access, infrastructure (e.g. real estate), and general competitiveness. The global economy and its commercial geography are coordinated by major financial centers, many of which correspond to the most important cities in the world in
Phases of the Export-Oriented Paradigm
A common strategy for economic growth that has been followed by several Pacific Asian economies is the export-oriented model. It can be divided into three phases: Japan and South Korea represent good examples of export-oriented economies that went through all these stages. More recently (post-COVID-19), China reached Phase III, which
Economic Integration and Interdependencies
International trade promotes interdependencies since nations acquire what they lack and export what they have in surplus. Conventionally, nations were mostly limited to their national market, while external markets were protected by high tariffs and transportation costs. Low trade levels involved low levels of interdependency and economic efficiency. A decline
International Trade, Transportation Chains and Logistics
Source: Rodrigue, J-P (2012) “Supply Chain Management, Logistics Changes and the Concept of Friction”, in P.V. Hall and M. Hesse (eds) Cities, Regions and Flows, London: Routledge. ISBN 978-0-415-68219-0. International trade is based on the notion of exchange, which involves what is being traded, the partners involved as well as
7.4 – Logistics and Freight Distribution
Author: Dr. Jean-Paul Rodrigue Logistics involves a broad set of activities dedicated to the transformation and distribution of goods, from raw material sourcing to final market distribution as well as the related information flows. 1. The Nature of Logistics Derived from the Greek logistikos (to calculate), the word logistics is
7.3 – Freight Transportation and Value Chains
Author: Dr. Jean-Paul Rodrigue A value chain is a functionally integrated network of production, trade, and service activities covering stages from the transformation of raw materials, manufacturing to the delivery of finished goods to a market. 1. Contemporary Production Systems As the fourth industrial revolution unfolds, production and consumption are two core
7.2 – Globalization and International Trade
Author: Dr. Jean-Paul Rodrigue International trade is an exchange of goods or services across national jurisdictions subject to regulatory oversight and taxation. Inbound trade is defined as imports and outbound trade is defined as exports. 1. The Flows of Globalization In a global economy, no nation is self-sufficient, which is