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Journal Article•DOI•

Integrating world cities into production networks : the case of port cities

Wouter Jacobs1, César Ducruet2, Peter W. de Langen3•
Erasmus University Rotterdam1, University of Paris2, Eindhoven University of Technology3
01 Jan 2010-Global Networks-a Journal of Transnational Affairs (Wiley-Blackwell)-Vol. 10, Iss: 1, pp 92-113
TL;DR: In this paper, the location patterns of firms that provide specialized advanced producer services (APS) to international commodity chains that move through seaports are analyzed and the authors conclude that while port-related APS activities predominantly follow the world city hierarchy, a number of port cities stand out because they act as nodes in global commodity flows and as centres of advanced services related to shipping and port activities.
Abstract: In this article we analyse the location patterns of firms that provide specialized advanced producer services (APS) to international commodity chains that move through seaports. Such activities can take place in world cities or in port cities. The analysis of APS location patterns in port cities provides a good opportunity to integrate the study of world cities into the framework of Global Production Networks. Based upon our empirical findings, we conclude that while port-related APS activities predominantly follow the world city hierarchy, a number of port cities stand out because they act as nodes in global commodity flows and as centres of advanced services related to shipping and port activities. Based on these empirical findings we address future avenues of research.

Summary (2 min read)

Jump to: [Introduction] – [Integrating World Cities and Global Production Networks] – [Towards an integrated approach] – [The case of port cities] – [Empirical Results] – [Relation with Commodity Flows] and [Conclusions]

Introduction

  • Producer services (APS) to international commodity chains that move through seaports.
  • Based upon their empirical findings, the authors conclude that while port-related APS activities predominantly follow the world city hierarchy, a number of port cities stand out because they act as nodes in global commodity flows and as centres of advanced services related to shipping and port activities.
  • The focus is on how the dynamics of urban hierarchies is related to the overall restructuring of the world economy (Friedmann 1986).

Integrating World Cities and Global Production Networks

  • Rather than providing a complete overview of the conceptual evolution of GCC-GVC-GPN and world city network research, the authors compare them conceptually and methodologically and address how an integrative approach could advance the study of the global economy (for a complete review, see Coe et al.
  • Hence, although the concept of network is their core unit of analysis, the respective interests of the WCN school (i.e. international connectedness of cities through corporate networks), and of the GPN-school (i.e. territorial embeddedness of - social - networks involved in global commodities) remain somewhat different in nature and scope.
  • The GPN approach takes a more sophisticated and theoretical stand by emphasizing the relational character of networks (Dicken et al. 2001).
  • Nevertheless, the authors agree with them that research on GPNs should incorporate more explicitly quantitative data and relevant statistical tools into their analytical apparatus.
  • GCC/GVC primarily focuses on the governance of inter-firm relationships, whereas GPN encompasses both intra- and inter-firm relationships and actors such as the state, NGOs, and international regulatory agencies.

Towards an integrated approach

  • Recently, the WCN school has started to develop a relational approach.
  • More specifically, this contribution recognizes that cities are both embedded within networks (in this case of international operating advanced producer services) and within territorial contexts.
  • Thus, despite little evidence about the specific role of APS within commodity chains and global production networks, the aforementioned studies have fostered integration between WCN and GPN frameworks towards a more accurate picture of the „nexus of interconnected functions, operations and transactions through which a specific product or service is produced, distributed and consumed‟ (Coe et al. 2008: 2).
  • Such an approach demands that the authors analyse the sector specificity of advanced producer services.

The case of port cities

  • Seaports have not received much attention in both bodies of research.
  • On the other hand, WCN has largely ignored the significance of commodity flows and the role of APS in relation to these flows.
  • Some ports are serviced completely by APS firms located elsewhere, while other port cities will attract more APS firms.
  • In port cities and world port cities, urban and port functions coexist in relative harmony and interdependence.
  • By combining both data sources, the authors can see how port cities are positioned within the global flow of commodities and within the corporate networks of specialized advanced producer services.

Empirical Results

  • The global picture of maritime and port-related APS.
  • When the authors look at the global picture of maritime related APS, one of the clearest findings is the dominant position of London.
  • In addition, London is set apart in terms of international links, especially with Hong Kong, Singapore, New York and Tokyo.
  • The authors data also show the relatively strong position of some cities that do not have a seaport, such as Madrid, Moscow and Paris.
  • The position of cities in the graph thus echoes their respective proportion of exclusive linkages with other cities and their relative importance in terms of decision functions.

Relation with Commodity Flows

  • Total annual throughput volume per port (in metric tons) is used as measure of port activity.
  • There is no straightforward relation between APS establishments and throughput tonnage (the authors do not observe noticeable correlations, cf. Table 3).
  • The service centres are port cities that have strong positions within APS networks but not within the physical flows of goods.
  • A more detailed picture may be obtained from the comparison of rank in the APS hierarchy and distribution of commodity shares in total port traffic by port city (Table 4).
  • Northern range port cities such as Rotterdam, Hamburg, and Antwerp rank high as locations of APS due to the presence of a strong port cluster embedding local and global industries with the port function.

Conclusions

  • Based upon their conceptual analysis, the authors developed a topology of locations that are firmly inserted in international physical commodity chains and serve as centres of specialized advanced producer services.
  • The concentration of maritime APS firms within non-port cities such as Madrid, Moscow and Paris supports this argument: these specialized APS agglomerate on the basis of something other than commodity flows, like proximity to political-administrative units, APS services in general or proximity to customers (e.g. headquarters of ship owners).
  • This inconclusive statement calls for more empirical research in which the following methodological issues should be taken into account.
  • Their results indicate that some port cities attract more APS than predicted by their position in the WCN hierarchy.
  • Some methodological issues may be addressed, such as an analysis based on morphological and/or functional criteria defining port cities based on port jurisdictions or functional economic areas.

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Integrating world cities into production networks: The
case of port cities
Wouter Jacobs, César Ducruet, Peter W. de Langen
To cite this version:
Wouter Jacobs, César Ducruet, Peter W. de Langen. Integrating world cities into production networks:
The case of port cities. Global Networks, Wiley, 2010, 10 (1), pp.92-113. �halshs-00459509�
Integrating World Cities into Production Networks:
The Case of Port Cities
Published in: Global Networks 10(1), pp. 92-113 (2010)
Wouter Jacobs, Cesar Ducruet and Peter de Langen
W. Jacobs Erasmus School of Economics, Erasmus University Rotterdam, The Netherlands
wjacobs@ese.eur.nl
C. Ducruet French National Centre for Scientific Research (CNRS), University of Paris-I
Sorbonne, UMR 8504 Géographie-Cités,Paris, France
ducruet@parisgeo.cnrs.fr
P.W. de Langen Eindhoven University of Technology, Department of Industrial Engineering
& Innovation, The Netherlands, and Port of Rotterdam Authority
pw.langen@portofrotterdam.com
Abstract This paper analyses the location patterns of firms that provide specialized advanced
producer services (APS) to international commodity chains that move through seaports. Such
activities can take place in world cities or in port cities. The analysis of APS location patterns
in port cities provides a good opportunity to integrate the study of world cities into the
framework of global production networks. Based upon our empirical findings, we conclude
that while port-related APS activities predominantly follow the world city hierarchy, a
number of port cities stand out because they act as nodes in global commodity flows and as
centres of advanced services related to shipping and port activities. Based upon these
empirical findings we address future avenues of research.
Keywords world city, global production network, port city, advanced producer services
Since the mid-1990s, a large body of research has emerged that deals with processes of
economic-geographical globalization and the formation of global production networks, global
value and commodity chains (Coe et al. 2004; Dicken et al. 2001; Ernst and Kim 2002;
Gereffi and Korzenwiecz 1994; Gereffi et al. 2005; Henderson et al. 2002; Kaplinsky 2004).
This research aims to conceptualize and understand the processes of industrial restructuring
and the deregulation of national markets that has taken place since the late 1970s and resulted
in a new spatial division of labour. Feenstra (1998: 31) summarizes this process as „the
integration of world trade and disintegration of production‟.
During the same period, a different strand of research has emerged that focuses on the
formation of world or global cities (Beaverstock et al. 2000; Knox and Taylor 1995; Sassen
1991; Taylor 1997, 2004). This research stream analyses how city hierarchies and urban
systems are linked worldwide through corporate networks of advanced producer services (e.g.
banks, insurance companies, and law firms) that control flows of capital and information. The
focus is on how the dynamics of urban hierarchies is related to the overall restructuring of the
world economy (Friedmann 1986). Both schools (hereafter referred to as GCC-GVC-GPN
and WCN) provide different but complementary analyses of the globalization of the economy.
Few studies have attempted to conceptually and empirically integrate both bodies of research.
Such integration seems necessary as it allows us to provide a more complete picture of the
structure and evolution of the global economy. In this contribution to the special issue, we
argue that port cities are an excellent area to empirically investigate the interaction between
global commodity chains and advanced producer services.
This paper explores to what extent specific maritime and port-related advanced producer
services are concentrated in world cities in general and in port cities in particular.
Theoretically, the embeddedness of port cities in global networks needs further understanding.
Interactions between (maritime) port activities that facilitate global commodity flows and
other types of economic activities, most notably advanced producer services, are relevant to
this area of research. Practically, port cities compete to attract port-related firms. Attracting
APS may be a good strategy for port cities to upgrade their economies and strengthen the
position of ports in a particular commodity chain.
The aims of this paper are twofold. First, we aim to integrate the respective conceptual
frameworks of GCC-GVC-GPN and WCN. Second, we develop a method that allows us to
empirically investigate the role and position of port cities in both global commodity chains
and world city networks. This paper is structured as follows. In the next section, we look at
the similarities and differences between GCC-GVC-GPN and WCN and discuss the role of
port cities as a location where both advanced producer services and global commodity chains
come together. We present an analytical framework and a research method in section three
and our empirical results in section four. This paper ends with conclusions and future
directions of port city research.
Integrating World Cities and Global Production Networks
Rather than providing a complete overview of the conceptual evolution of GCC-GVC-GPN
and world city network research, we compare them conceptually and methodologically and
address how an integrative approach could advance the study of the global economy (for a
complete review, see Coe et al. 2008; Hess and Yeung 2006 on GCC-GVC-GPN; Brenner
and Keil 2006; Derudder 2006 on WCN).
World city networks and global production networks
Both approaches analyse the dynamics and geography of the global economy. They start with
the premise of a new globalized division of labour and industrial organization (cf. Fröbel et al.
1980), which resulted from a variety of factors such as changing economic policies
1
, and the
cost reduction of new communication and transport technologies. This perspective draws
inspiration from Castells‟ (1996) global transformation from a „space of places‟ to a „space of
flows‟, although both approaches explicitly recognize that the world has become both
(Derudder and Taylor 2005; Henderson et al. 2002; for a similar statement see Hesse, this
issue).
Hence, although the concept of network is their core unit of analysis, the respective interests
of the WCN school (i.e. international connectedness of cities through corporate networks),
and of the GPN-school (i.e. territorial embeddedness of - social - networks involved in global
commodities) remain somewhat different in nature and scope. The widely used WCN
approach put forth by Sassen (1991) and Taylor (2004) looks at networks as the intra-firm
links of advanced producer services in different locations. WCN does not take into account
relations between these types of firms and other actors, nor does it pay attention to historical
and institutional contexts that may partly explain interactions among firms and the structure of
city networks. The GPN approach takes a more sophisticated and theoretical stand by
emphasizing the relational character of networks (Dicken et al. 2001). Understanding
networks as such requires the identification of different network actors, their social
relationships and power configurations, as well as the structural outcomes of these
interactions.
As a result, the methodological approach differs. The WCN school draws on large datasets of
location patterns of the world‟s leading advanced producer service providers. The GPN
approach as mentioned by Hess and Yeung (2006) is essentially a heuristic approach with an
underdeveloped methodological foundation (Dicken 2004). As a result, GPN research tends to
be qualitative with a strong preference for interviews with key actors. As Hess and Yeung put
it (2006: 1201), „it falls short of delivering a rigorous analysis that can give “the big picture”
of GPNs on a global scale‟. The WCN-approach provides the big picture on a global scale
but often at the expense of a deeper understanding of the historical, institutional and strategic
conditions that influence the formation development of cities and city networks. Nevertheless,
we agree with them that research on GPNs should incorporate more explicitly quantitative
data and relevant statistical tools into their analytical apparatus.
GCC-GVC-GPN is conceptually more comprehensive in scope than WCN. It is important to
distinguish between GPN and GCC/GVC. According to Coe et al. (2008: 2), GCCs/GVCs are
considered linear structures with sequential stages in the production-distribution-consumption
chain through which value is added, whereas GPN „strives to go beyond such linearity to
incorporate all kinds of network configuration‟. This implies that the GPN approach also
includes non-linear linkages and social relationships (e.g. with state agencies or advanced
producer services) that are active at different stages within the chain and that are not
necessarily directly involved in the actual physical flow of the commodity at stake. Moreover,
GPN is more comprehensive in the sets of actors and types of relationships it includes.
GCC/GVC primarily focuses on the governance of inter-firm relationships, whereas GPN
encompasses both intra- and inter-firm relationships and actors such as the state, NGOs, and
international regulatory agencies. Furthermore, GPN pays attention to specific types of
relationships (such as public private partnerships) or social network formations (e.g. business
associations).
Towards an integrated approach
Recently, the WCN school has started to develop a relational approach. Beaverstock et al.
(2002) see the formation of world city networks as the outcome of the interaction between
two communities: territorial (city and state) and functional-economic (firm and sector). This
approach explicitly recognizes the role and influence of sector-specific institutions, multi-
scalar governance arrangements and state-enforced regulations on the formation of inter-
urban connections. As such, they have brought world city network analyses more in line with
the GPN framework by including other actors as well as institutional and sector-specific
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"Integrating world cities into produ..." refers background in this paper

  • ...In the case of GPN, much inspiration is drawn from Granovetter (1985) on the „social embeddedness‟ of rational economic behavior....

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Frequently Asked Questions (2)
Q1. What have the authors contributed in "Integrating world cities into production networks: the case of port cities" ?

This paper analyses the location patterns of firms that provide specialized advanced producer services ( APS ) to international commodity chains that move through seaports. The analysis of APS location patterns in port cities provides a good opportunity to integrate the study of world cities into the framework of global production networks. Based upon their empirical findings, the authors conclude that while port-related APS activities predominantly follow the world city hierarchy, a number of port cities stand out because they act as nodes in global commodity flows and as centres of advanced services related to shipping and port activities. 

Future research should take into account these points of attention. Further studies that focus on a particular commodity and a specific local context should shed more light on the role of specialized advanced producer services within global production networks. In addition, research may benefit from further application of social network analysis through graph visualization and the use of clustering techniques to highlight the cliquishness of port cities within geographical and/or functional regions of the world. It will also allow us to include specific institutional features into the analysis as well as to assess the role of strategic policy and government agencies in shaping the development paths of port cities in the global economy.