Air cargo services and the electronics industry in Southeast Asia

Air cargo services are among the most important producer services for manufacturers with internationalized production networks. In the context of supply chain management strategies, such services allow firms to respond more effectively to competitive forces in global markets. Our research aims to relate to and deepen the theoretical literature on advanced producer services and global production networks by examining the demand for air cargo services in the electronics industry in Southeast Asia, an industry and a region in which air cargo services are particularly significant. Using an air cargo intensity index for each of over 120 firms from Singapore, Penang, Kuala Lumpur, and Manila, we show that the diversity of air cargo usage is related to several aspects of firm structure and operation. Our research suggests that product type, internationalization, localization, product cycle (obsolescence), and other factors such as a firm’s material management strategy are especially critical. New directions for research that will build upon these findings are noted.

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