Mammadov K. The role of logistics services in global production networks.

Methodological approaches to the study of the role of logistics services in global production networks are analyzed and generalized. The genesis of modern production networks in the conditions of globalization and fragmentation of economic activities are studied on the basis of methodological foundations. The definition of the term "global production networks" is proposed, the features of servicification of global value chain creation are outlined, and the interactivity of global production networks and logistics services is identified. The tendencies of globalization of the logistic infrastructure of international production are revealed. The dominant role of logistics services in global production networks shows up in upward phases of the international production, in contrast to the critical role of the institutional support in its downward phases, which can be explained by different mechanisms for value added creation in these phases. In overall, a combination of effective logistics infrastructure and effective institutions can enhance essentially comparative advantages of countries in global production networks. The prerequisites and advantages of the practice of global logistics outsourcing as a form of externalization of the economic activity are substantiated. Participants of logistics outsourcing can transform market capabilities into: (i) cost-effectiveness; (ii) increased effectiveness of asset management; (iii) created network of product distribution; (iv) quick reaction on client requirements; (v) withdrawal of capital investment and; vi) flexibility of supply chain. The institutional and market barriers to Azerbaijan’s integration in global production networks are identified. The following interconnected problems need to be solved in the sphere of institutional transformations of the logistics sector in Azerbaijan in the context of integration in global production networks: (i) to overcome the system recession of cargo transportations, caused by the decreasing transit (exports) of oil and oil refinery products; (ii) to develop logistics infrastructures in parallel with increasing new production capacities; (iii) to develop multimodal logistics routs; (iv) to implement institutional reforms in management, in order to increase the investment attractiveness of domestic companies; (v) to take measures for cutting the tariff value of transit by the Azerbaijan territory, to make logistics less time-consuming and minimize the scope of the procedures for registration of export-import transactions. An econometrician analysis of the degree of Azerbaijan’s participation in the transport and logistics complex of global value chains by value of imported components in exports is carried out. It is shown that Azerbaijan is at the initial phase of integration into international production chains.