scholarly journals Currency Unions and Global Value Chains: The Impact of the Euro on the Italian Value Added Exports

2021 ◽  
Author(s):  
Giovanni Cerulli ◽  
Silvia Nenci ◽  
Luca Salvatici ◽  
Antonio Zinilli
Keyword(s):  
Value Chain ◽  
Control Method ◽  
Value Added ◽  
Global Value Chains ◽  
Trade Flows ◽  
Value Chains ◽  
Synthetic Control ◽  
Currency Unions ◽  
Trading Partners ◽  
The Impact

AbstractMany estimates of the effect of the common currency on trade have been made, although a clear answer has yet to be given. This work analyses the trade effect of the euro by providing a twofold contribution. First, one of the main stylised facts that has emerged from the recent literature is that trade flows in gross terms can differ substantially from those measured in value added terms. Accordingly, we focus on the structure of global value chains rather than conventional gross trade. To this aim, we provide an estimate of the value added trade flows that would have existed between Italy and its main trading partners if Italy had not joined the monetary union and show how, and to what extent, international production sharing has been affected. Second, we use a methodology that is different from traditional, parametric ones. Specifically, we apply the synthetic control method to construct appropriate counterfactuals and estimate the causal impact of the euro. Our empirical analysis provides a relevant case for considering value added in addition to gross trade since it shows that the euro facilitated the forward integration of Italian exports, whereas it slowed down backward integration. Overall, these results suggest that the euro had an impact on Italian global value chain participation by altering value added flows across member as well as non-member states, with great heterogeneity in the results across value added trade components and sectors.

Russia–ASEAN: Trade and Global Value Chains

2015 ◽  
pp. 25-39
Author(s):  
K. Muradov
Keyword(s):  
South Korea ◽  
Value Chain ◽  
Bilateral Trade ◽  
Value Added ◽  
Global Value Chains ◽  
Trade Flows ◽  
Value Chains ◽  
Trade Data ◽  
Traded Goods ◽  
Trade In Value Added

Traditional trade statistics that originate in customs records is inadequate to measure the complex interdependencies in today’s globalized economy, or what is known as the global value chains. The article focuses on Russia–ASEAN trade. The author applies innovative methods of measuring trade in value added terms in order to capture the unobserved bilateral linkages behind the officially recorded trade flows. First, customs and balance of payments sources of bilateral trade data are briefly reviewed. For user, there are at least two inherent problems in those data: the inconsistencies in “mirror” trade flows and the attribution of the origin of a traded product wholly to the exporting country. This results in large discrepancies between Russian and ASEAN “mirror” trade data and, arguably, their low importance as each other’s trade partners. Next, the author explores new data from inter-country input-output tables that necessarily reconcile bilateral differences and offer greater detail about the national and sectoral origin or destination of traded goods and services. Relevant data are derived from the OECD-WTO TiVA database and are rearranged to obtain various estimates of Russia–ASEAN trade in value added in 2009. The main finding is that sizable amount of the value added of Russian origin is embodied in third countries’ exports to ASEAN members and ASEAN members’ exports to third countries. As a result, the cumulative flow of Russia’s value added to ASEAN members is estimated to be 62% larger than the direct gross exports, whereas for China and South Korea it is, respectively, 21% and 23% smaller. The indirect, unobserved value added flows can be largely explained by the use of Russian energy resources, chemicals and metals as imported inputs in third countries (China, South Korea) and ASEAN members’ own production. The contribution of these inputs is then accumulated along the value chain. Finally, the most important sectoral value chains are visualized for readers’ convenience. So far, it’s apparent that Russia is linked to ASEAN countries through intricate production networks and indirectly contributes to their trade with third countries.

Global value chain linkages and domestic value-added content: Empirical evidence

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Bhushan Praveen Jangam ◽  
Badri Narayan Rath
Keyword(s):  
Value Chain ◽  
Least Squares Method ◽  
Value Added ◽  
Value Chains ◽  
Global Value Chain ◽  
Content Type ◽  
Services Sector ◽  
The Impact ◽  
The Relationship ◽  
Practical Implications

Purpose This paper aims to examine the relationship between global value chains (GVCs) and domestic value-added content (DVA) in a panel of 58 countries for the period 2005–2015. Design/methodology/approach First, the authors quantify the refined measures of GVC linkages by using the Borin and Mancini (2019) decomposition technique. Second, the authors apply the feasible generalised least squares method to test the relationship between GVCs and DVA empirically. Findings First, the authors find that GVC links are crucial to the enhancement of DVA. Second, a study at the sectoral level reveals that GVC links in the primary sector raise DVA whilst reducing DVA in the services sector. Third, the authors find that only upstream activities enhance value-added content. Fourth, the authors note the augmenting role played by national policies in mediating the gains associated with GVCs. Finally, the authors note that the outcomes associated with GVCs are consistent when the sample of countries is divided into groups based on income. Practical implications The results lead us to urge policymakers to promote greater integration of business activities into GVCs to reap their benefits. Originality/value This paper contributes to the research on the impact of GVCs on DVA by emphasising the significance of the types of GVC activities and policies that improve DVA.

scholarly journals Trade costs, global value chains and economic development

2018 ◽  
Author(s):  
Yuan Zi
Keyword(s):  
Developing Countries ◽  
Economic Development ◽  
Value Chain ◽  
Wage Gap ◽  
Global Value Chains ◽  
Trade Costs ◽  
Value Chains ◽  
Trade Frictions ◽  
The Impact ◽  
North And South

Abstract This paper develops a model to study the impact of trade costs on developing countries’ industrialization when sequential production is networked in global value chains (GVCs). In a two-country setting, a decrease in trade costs of intermediates is associated with South joining and moving up the value chain and both North and South experiencing a welfare improvement. The wage gap between North and South first increases and then decreases. Extending the model to a multi-country setting, I show that reduced trade frictions lead to South countries joining GVCs due to wage differentials and low trade costs. This increases the wage in North but may decrease the wages of South countries that are already part of the network. Moreover, South countries that join tend to be regionally clustered. The model provides a first look at GVCs from the development angle, and raises policy questions regarding the governance of GVCs.

scholarly journals Opportunities for the integration of the Ukrainian industry into global value chains

2018 ◽  
pp. 65-74 ◽  
Author(s):  
Оksana Kushnirenko ◽  
Olga Zarudna
Keyword(s):  
Production Systems ◽  
Negative Impact ◽  
Value Added ◽  
Global Value Chains ◽  
Value Chains ◽  
Manufacturing Companies ◽  
Production Networks ◽  
Processing Industry ◽  
Pass Through ◽  
The Impact

Relevance of the research topic is due to the impact of globalization which had brought an increasing number of more and more products pass through global value-added chains to reach the end users. That  has led to new forms of transnational production,  that gives new opportunities for Ukrainian producers. Formulation of the problem. The utilizing the opportunities and mitigating the negative impact of the liberalization of foreign trade makes new requirements  for production oriented businesses in a more open and competitive international environment. The development of global production systems provides opportunities for participating in global value chains, that opens up new opportunities for the industry of Ukraine and requires further scientific researches. Analysis of recent research and publications. There are various dimensions to the development of global value chains of industry that need to be taken into account. The most important of these are P.Marsh, R.Kaplinski and Morris, K.Schwab, R.Rajk, D.Rodrik, E.Rajnert, S.Veber, P Labasta, G. Dzerffi, Geets VM, Vishnevsky AS, Deineko LV, Kizim NA, Kvasha TK, Lyashenko VI, Musina LA, Pyatnitsky VT, Sidenko V.R. and others. Selection of unexplored parts of the general problem. In the context of increasing influence of integration processes on the development of international trade and production, the problem of choosing the most effective ways of integration into global value chains for the processing industry of Ukraine as a reliable supplier of products with a higher degree of processing remains insufficiently studied. Setting the task, the purpose of the study. The objective of the article is to analyze the features of the formation of value added chains and ways of integrating them into the processing industry of Ukraine as a reliable supplier of products with a higher degree of processing. The purpose of the study is developing the proposals for possible constructive ways of promoting the integration of Ukrainian processing industry into global value-added chains. Method or methodology for conducting research. This paper used of general scientific: abstract-logical, induction and deduction, systemic approach; analysis, and synthesis and special scientific research methods: statistical comparisons, grouping, sampling; structure-functional analysis, expert judgments. Presentation of the main material (results of work).The existing approaches to the definition of the notion of value added chains are disclosed and their grouping is carried out on significant grounds; The features and modern trends in the development of global value chains in the processing industry are explored; The opportunities and the existing risks have been identified in the chain of value added for the developing countries; and substantiated practical recommendations for choosing the most effective ways of integration into global value chains for the processing industry of Ukraine as a reliable supplier of products with a higher degree of processing. The field of application of results. The results of this research can be applied in the process of formation and implementation of Ukraine's integration industrial policy. Conclusions according to the article. In the article authors was made in  assessment of the integration of Ukrainian manufacturing companies into global value chains. The adoption of effective tools and instruments for encouraging the entry of Ukraine's processing industry into global value chains provides for the creation of effective policies and institutions, aimed at eliminating restrictions in the the Ukrainian producers integration into international production networks. 

scholarly journals Innovation in Hungary - The Impact of EU Accession and Integration into Global Value Chains

2014 ◽  
Vol 42 (1) ◽  
pp. 40-59 ◽  
Author(s):  
Andrea Szalavetz
Keyword(s):  
Value Chain ◽  
Global Value Chains ◽  
Policy Transfer ◽  
Value Chains ◽  
Minor Importance ◽  
Manufacturing Companies ◽  
Eu Accession ◽  
Eu Membership ◽  
The Impact ◽  
The Eu

Abstract This paper argues that EU accession has brought about minimal changes in the patterns of innovation in Hungary. The reason why is not that the ‘EU factor’ is of minor importance; rather, it is Hungary's inability to use EU resources effectively, so as to fully benefit from EU membership. The Hungarian story also demonstrates that the EU cannot block member states from reversing reform or abusing the opportunities EU membership offers to them. We contend that globalization (global value chain integration) has more effectively contributed to Hungary's knowledge-based upgrading than Europeanization (in the sense of policy transfer; access to EU Structural & Cohesion Funds, and integration in the European Research Area). This argument is substantiated with a case study on innovation strategy design and implementation, which illustrates the ambiguous impact of Europeanization, which is contrasted with our investigation of integration in global value chains, conducted through interviews of foreign-owned manufacturing companies about their R&D-based upgrading experience.

icio: Economic analysis with intercountry input–output tables

2021 ◽  
Vol 21 (3) ◽  
pp. 708-755
Author(s):  
Federico Belotti ◽  
Alessandro Borin ◽  
Michele Mancini
Keyword(s):  
Policy Research ◽  
Value Added ◽  
Global Value Chains ◽  
Trade Flows ◽  
Value Chains ◽  
World Bank Group ◽  
Input Output ◽  
Working Paper ◽  
Level Of Aggregation ◽  
Bank Group

Several new statistical tools and analytical frameworks have been recently developed to measure countries’ and sectors’ involvement in global value chains. Such a wealth of methodologies reflects the fact that different empirical questions call for distinct accounting methods and different levels of aggregation of trade flows. In this article, we describe icio, a new command for the computation of the most appropriate measures of trade in value added as well as participation in global value chains. icio follows the conceptual framework proposed by Borin and Mancini (2019, Policy Research Working Paper WPS 8804; WDR 2020 Background Paper, World Bank Group), which in turn extends, refines, and reconciles the other main contributions in this strand of the literature. icio is flexible enough to work with any intercountry input–output table and with any level of aggregation of trade flows.

Methodological approaches to global value chains analysis

2019 ◽  
pp. 14-18
Author(s):  
Anna Maksymenko
Keyword(s):  
Value Chain ◽  
Full Range ◽  
Value Added ◽  
Governance Structure ◽  
Global Value Chains ◽  
Business Environment ◽  
Research Topic ◽  
Value Chains ◽  
Productive Capacity ◽  
Methodological Approaches

The article is devoted to overview of methodological approaches to the analysis of the global value chains. Value chain is a full range of activities which is done by firm or employees in order to bring a product from its conception to its end use. This also includes activities such as design, production, marketing, distribution and support to the final consumer. Global value chains (GVC) involve different type of firm from different countries in such activities. The paper emphasizes that this research topic is interdisciplinary. Topics in GVC literature include variety of aspects: impact of globalization on employment, horizontal and vertical links between enterprises in the chain, governance structure of organizing international production networks, supply and income distribution, spread of innovation and technology, firms’ upgrading etc. Generally, A. Morrison, C. Pietrobelli and R. Rabellotti have identified two different “schools” or approaches within the broad GVC literature: the internationalist approach and the industrialist approach. Typology of global value chains is quite developed topic. Such types as market type, modular type, relational type, captive type, hierarchy type of governance have been distinguished and described by foreign researches. Elements of modernization processes of the value chain have been highlighted. Approaches to upgrading of value added production can be considered as upgrading of products (and packaging), upgrading of processes, functional upgrading, inter-sectoral upgrading. Also concept of upgrading can relate to upgrading of value chain-network structure and upgrading of governance structures. The topic of barriers for integration in global value chains for developing countries is crucial. There are several factors affecting developing country competitiveness in GVCs: productive capacity, infrastructure and service, business environment, trade and investment policy, industry institutionalization. The main conclusions emerging from analytical overview presented in this article are that various approaches to GVCs analysis exist and that the choice of particular approach should be based on specific research topic which is investigated as well as data sources (e.g. firms’ business record, input-output tables, interviews with enterprises, business association, government officers etc).

Lead firm’s reconfiguration decision and performance of the value chain

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Andrea Gelei ◽  
Magdolna Sass
Keyword(s):  
Value Chain ◽  
Business Performance ◽  
Organizational Design ◽  
Value Added ◽  
Global Value Chains ◽  
Value Chains ◽  
Content Type ◽  
Performance Consequences ◽  
And Performance ◽  
Lead Firm

Purpose This paper aims to trace the performance consequences of within-lead firm reconfigurations of global value chains with respect to business performance and upgrading. Design/methodology/approach The study is based on two detailed company case studies which are analysed in an organizational design approach. Findings Lead firms systematically separate and internalize high value-added activities in otherwise low value-added processes leading to constant reconfigurations and reorganizations of the production processes in global value chains. The study finds that similar reconfigurations may trigger different changes and changes and performance consequences may differ considerably according to the level of analysis. The two cases help to understand the specific roles of the outsourcing and offshoring decisions in shaping actual global value chain structures. Originality/value The consequences of within-lead firm reconfigurations are rarely analysed in the literature.

scholarly journals Poverty chains and global capitalism

2018 ◽  
Vol 23 (1) ◽  
pp. 71-97 ◽  
Author(s):  
Benjamin Selwyn
Keyword(s):  
Value Chain ◽  
Firm Value ◽  
Value Added ◽  
Global Value Chains ◽  
Global South ◽  
Value Chains ◽  
Global Value Chain ◽  
Original Material ◽  
Value Chain Analysis ◽  
Secondary Sources

The proliferation of global value chains is portrayed in academic and policy circles as representing new development opportunities for firms and regions in the global south. This article tests these claims by examining original material from non-governmental organizations’ reports and secondary sources on the garment and electronics chains in Cambodia and China, respectively. This empirical evidence suggests that these global value chains generate new forms of worker poverty. Based on these findings, the article proposes the novel Global Poverty Chain approach. The article critiques and reformulates principal concepts associated with the Global Value Chain approach – of value-added, rent and chain governance – and challenges a core assumption prevalent within Global Value Chain analysis: that workers’ low wages are a function of their employment in low productivity industries. Instead, it shows that (1) many supplier firms in the global south are as, or more, productive than their equivalents in the global north; (2) often predominantly female workers in these industries are super exploited (paid wages below their subsistence requirements) and (3) chain governance represents a lead firm value-capturing strategy, which intensifies worker exploitation.

A Guide to Using the Synthetic Control Method to Quantify the Effects of Shocks, Policies, and Shocking Policies

2021 ◽  
pp. 056943452110197
Author(s):  
Bibek Adhikari
Keyword(s):  
Comparison Group ◽  
Control Method ◽  
Value Added ◽  
Synthetic Control ◽  
Economic Policies ◽  
Synthetic Control Method ◽  
Capstone Courses ◽  
A Value ◽  
Group I ◽  
The Impact

Governments introduce various policies intending to improve the overall economy or to influence individual behavior. However, estimating the causal impact of these policies is challenging. I describe how the Synthetic Control Method (SCM) can be used in undergraduate econometrics or capstone courses to estimate the impact of economic policies. The SCM is a data-driven design that provides a systematic way of constructing a comparison group that looks very similar to the group implementing the policy. Thus, it allows us to estimate the policy’s impact by comparing the outcome variable’s post-policy path between the policy group and the comparison group. I review a broad range of policies and events that are analyzed using this method, briefly describe the theory behind the method, discuss various best practices, and provide a step-by-step implementation guide using the adoption of a value-added tax (VAT) by France as an example. JEL Classifications: C01, A1, A2

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