The Geographic Extent of Global Supply Chains: Evidence from Southeast Asia

Tomohiro Machikita, Yasushi Ueki

    Research output: Contribution to journalJournal articlepeer-review

    Abstract

    We study the extent to which inter-firm relationships are locally concentrated
    and what determines firm differences in geographic proximity to domestic or foreign suppliers and customers. From micro-data on selfreported customer and supplier data of firms in Indonesia, the Philippines, Thailand, and Vietnam, we measure the distances between firm pairs, that is, the distance to the main supplier and the distance to the main customer for the surveyed firms. The distances to suppliers and customers are shorter for indigenous firms in these Southeast Asian countries; but the arm’s length differs across countries. The distance between firm pairs differs widely across firms within narrowly defined industries and countries. We find that both firm-level transaction costs and capabilities affect the distances between customers and suppliers. The distance to suppliers is longer for firms that have accepted guest engineers from the main
    supplier to maintain production processes. Further, we find that the distances
    to suppliers and customers are longer for firms that have undertaken organisational change or improved marketing practices.
    Original languageEnglish
    JournalAsian-Pacific Economic Literature
    Volume26
    Issue number2
    Pages (from-to)72-87
    ISSN0818-9935
    DOIs
    Publication statusPublished - 2012

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