The mechanics of production networks in Southeast Asia: the fragmentation theory approach

Southeast Asia is truly a unique area in that it deeply gets involved with sophisticated international production networks extended to the whole East Asia. This chapter provides an overview on the current status of economic analysis on this issue, placing its emphasis on the newly developed fragmentation theory approach. The two-dimensional fragmentation model is introduced and employed for disentangling the mechanics of production networks as well as the spatial structure of networking in East Asia. Profound policy implication for further activating production networks and economic development in Southeast Asia and other less developed countries is also discussed.