The electronics industry in central and eastern Europe:an emerging production location in the alignment ofnetworks perspective

This paper analyses the emergence of central Europe as a new location for the productionof electronics. The main factors that drive integration in the region into global productionnetworks are also analysed, as well as prospects for upgrading the industry by using networkalignment perspectives.Foreign investment is the primary vehicle of integration of CEE electronics firms intoglobal production networks, and Hungary has moved furthest along this path, positioning itself asa major low-cost supply base in the region. Czech and Polish electronics industries are connected,in smaller, but increasing, degrees to international electronics production networks. Networks thatare being built in CEE in electronics are usually confined to subsidiaries with still limited localsubcontracting; they are export-oriented and are expanding.Local subsidiaries have mastered production capabilities and several subsidiaries in Hungary areEuropean mandate suppliers in their respective lines of business. EU demand is the main pullfactor, which gives cohesion to the actions of MNCs as well as to the action of local and nationalgovernments in CEE. The layer of local firms is still very weak with very limited capabilities incore technologies. This is the key weakness which prevents further alignment of networks in CEEelectronics. Local governments play an important role in working jointly with foreign investors inestablishing industrial parks and new capacities....