Production Linkages in and between Places : The Recent Development of the Bicycle Industry Agglomeration in Osaka

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  • 地域内・間の生産リンケージ : 大阪における自転車工業集積の近年の動向

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Abstract

Under the formidable circumstances where the Japanese bicycle industry faces increasing import competition and decline in size, Osaka's bicycle industry has gained prominence relative to other regions by the 1990s. I examine the local bicycle industry with a particular focus on how local firms have selectively developed and maintain production linkages at different scales. The findings are summarized as follows. First, increasingly important aspects of production linkages among local firms in Osaka are the speed and frequency of transactions. The local interfirm relationships are asymmetric in nature, and are influenced not only by technological intensity of production, but also by changes in extraregional contexts. Second, critical innovative activities are increasingly responsive to final demand. Geographical proximity among local firms for sharing intangible knowledge or for nurturing innovation has rather marginal importance. The role of collective institutions in innovation also appears indistinct. Third, some firms have been developing international production linkages, including outsourcing and overseas production. The development of these international linkages has differential consequences for the other local firms, promoting technological upgrading for some firms, while forcing strictly price-based competition or dissolving existing transaction relationships for others. In conclusion, this study demonstrates the difficulty of generalizing the processes and consequences of "hollowing out" in the local industrial agglomeration, once we recognize complex interactions of firms in and between places.

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