Global value chains and employment in developing economies

2019 ◽  
pp. 63-81
Author(s):  
Keyword(s):  
Developing Economies ◽  
Global Value Chains ◽  
Value Chains

scholarly journals GLOBAL VALUE CHAINS IN THE AGE OF UNCERTAINTY: ADVANTAGES, VULNERABILITIES, AND WAYS FOR ENHANCING RESILIENCE

Baltic Region ◽  
2021 ◽  
Vol 13 (3) ◽  
pp. 78-107
Author(s):  
Nataliya V. Smorodinskaya ◽  
Daniel D. Katukov ◽  
Viacheslav E. Malygin
Keyword(s):  
Structural Model ◽  
Developing Economies ◽  
Value Added ◽  
Global Value Chains ◽  
Growth Patterns ◽  
Value Chains ◽  
Ripple Effect ◽  
Economic Resilience ◽  
Supply Chain Resilience ◽  
Disruption Risk

In this paper, we seek to explain the fundamental vulnerability of global value chains (GVCs) to sudden shocks, as revealed by the COVID-19 pandemic crisis, and outline ways for enhancing their adaptability to the increased uncertainty at both conceptual and policy levels. We consider the concept and a typical multi-structural model of GVCs, highlighting the network complexity of the system of distributed production and trade in value added. Not only does this system bring competitive advantages to GVC partner countries, but also it entails risks of cascading production disruptions. We examine these risks by analysing the ripple effect of supply disruptions in GVCs when a sudden local shock can propagate globally through inter-firm supplier links, generating growing output losses across industries and economies. From this perspective, we describe the pandemic-induced breakdown in the global just-in-time supply system in spring 2020 and its role in the escalating global recession. In analysing the mechanisms of post-pandemic GVC adaptation to uncertainty, we look at the concept of economic resilience and properties of resilient systems (robustness, flexibility, redundancy, and dynamic sustainability). We scrutinise the supply chain resilience model used by leading MNEs (GVC organisers) in their disruption risk management at pre-disruption and post-disruption stages. We classify resilience strategies devised by MNEs after 2020 into three interrelated categories: namely, multi-structural GVC optimisation (diversification and relocation of suppliers), operational optimisation (building redundancy and production flexibility), and GVC digitalisation. We conclude by outlining windows of opportunity to improve international specialisation and growth patterns, which may open in the 2020s for developing economies, including Russia, due to the ongoing restructuring of GVCs and their global supplier networks.

Services and Global Value Chains: Servicification of Manufacturing and Services Networks

2015 ◽  
Vol 06 (03) ◽  
pp. 1550014 ◽  
Author(s):  
Rainer Lanz ◽  
Andreas Maurer
Keyword(s):  
Developing Economies ◽  
Value Added ◽  
Global Value Chains ◽  
Value Chains ◽  
Evidence Based ◽  
Measurement Issues ◽  
International Services ◽  
Trade In Value Added

The role of services as an input into manufacturing production — often termed "servicification" of manufacturing — is substantial in both developed and developing economies. The paper lays out conceptual and measurement issues related to services networks and provides evidence based on trade in value added statistics. Compared to goods value chains, services networks appear less fragmented internationally based on trade in value added statistics and survey evidence. However, to better capture the international services fragmentation, advances in statistics by enterprise characteristics and by mode of supply, i.e., taking into account the movement of labor and capital, are required.

Impact of Multinational Corporations’ Firm-Based Environmental Standards on Subsidiaries and their Suppliers: Evidence from Motorola-Penang

2005 ◽  
Author(s):  
Michael T. Rock ◽  
David P. Angel
Keyword(s):  
Multinational Corporations ◽  
Low Income ◽  
Developing Economies ◽  
Value Added ◽  
Global Value Chains ◽  
Value Chains ◽  
Development Programs ◽  
Environmental Standards ◽  
Production Networks ◽  
Global Production Networks

How successful are multinational corporations (MNCs) in extending their firm-based environmental standards to their wholly owned subsidiaries and local suppliers, particularly the small and medium sized firm suppliers in developing economies who operate as part of the global production networks of MNCs? Three developments suggest this is not an idle question. To begin with, the economic influence of MNCs is simply staggering. As Dowell et al. (1999: 4) state, the intra-firm transactions of the more than 40,000 MNCs with approximately 250,000 affiliates worldwide account for about 40% of world trade; foreign direct investment is roughly five times official development assistance, and the sales of the ten largest MNCs are larger than the GNP of the 100 poorest countries. This suggests that MNCs along with their affiliates and their suppliers have the potential for exerting substantial influences on local, national, regional, and global environments. Because most of the value added and employment in industry in most developing countries, including the developing economies of East Asia, is accounted for by small and medium sized firms that lie beyond the reach of most governments’ environmental regulatory agencies and because we suspect that the most viable path to technological upgrading and environmental improvement in the low income economies lies in finding ways to increase the participation of indigenous small and medium sized enterprises (SMEs) in the global value chains of multinationals, it is important to ask whether an upgrading strategy based on linking indigenous SMEs to the global value chains of MNCs can also be used to affect the environmental performance of SMEs. While not all the SMEs in any one developing economy are ever likely to be reached through the supply chains of MNCs, there is substantial evidence that governments working in concert with MNCs in vendor development programs linking SMEs to MNCs in some places such as Taiwan Province of China, Malaysia, and Singapore have affected the technological upgrading activities of indigenous small and medium sized firms. To date, there is little rigorous evidence to suggest that these vendor development programs have affected the environmental behavior of small and medium sized firms in the East Asian newly industrializing economies.

International trade: Research of the reasons for the fall

2019 ◽  
pp. 79-91 ◽  
Author(s):  
V. S. Nazarov ◽  
S. S. Lazaryan ◽  
I. V. Nikonov ◽  
A. I. Votinov
Keyword(s):  
Growth Rate ◽  
International Trade ◽  
Exchange Rate ◽  
Global Economy ◽  
Structural Changes ◽  
Global Value Chains ◽  
Value Chains ◽  
Negative Contribution ◽  
Basic Commodity ◽  
The Impact

The article assesses the impact of various factors on the growth rate of international trade. Many experts interpreted the cross-border flows of goods decline against the backdrop of a growing global economy as an alarming sign that indicates a slowdown in the processes of globalization. To determine the reasons for the dynamics of international trade, the decompositions of its growth rate were carried out and allowed to single out the effect of the dollar exchange rate, the commodities prices and global value chains on the change in the volume of trade. As a result, it was discovered that the most part of the dynamics of international trade is due to fluctuations in the exchange rate of the dollar and prices for basic commodity groups. The negative contribution of trade within global value chains in 2014 was also revealed. During the investigated period (2000—2014), such a picture was observed only in the crisis periods, which may indicate the beginning of structural changes in the world trade.

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