Growing with Global Production Sharing: The Tale of Penang Export Hub

Global production sharing—the division of production processes into geographically separated stages—is a central feature of economic globalization. This study seeks to broaden our understanding of global production sharing, and to explore policy options for developing countries to engage effectively in production networks through a case study of the export production hub in the State of Penang, Malaysia. The findings uphold Penang as a unique example of marrying national development strategy with emerging opportunities for international specialization within global production networks. The state government of Penang has not only attracted major multinational enterprises in global electronics industry but also helped them become deeply rooted in the economy through a well-design investment promotion strategy, infrastructure development, skills development and vocational training, and promoting a domestic vendor network around the branch plants of MNEs.