A Research Background of Global Value Chains

Purpose of this background note is to present some relevant research issues about India’s GVC, such as degree of India’s GVC linkages, by sector, by industry (preliminary analysis by GVC measures as well as in-depth econometric analysis), consequences of GVCs for economic prosperity i.e. industrial or economic upgrading (including trade-oriented upgrading and adaptation), the impact of GVCs on social upgrading, such as reflection on labour market dynamics (because social upgrading is not immediately associated with industrial or economics upgrading).

Smallholders and Farmworkers in Agricultural Value Chains: No Upgrading Without Collective Action and State Support

Journal of Labor and Society ◽

10.1163/24714607-bja10025 ◽

2021 ◽

pp. 1-23

Author(s):

Ismail Doga Karatepe ◽

Christoph Scherrer

Keyword(s):

Field Studies ◽

Theoretical Explanation ◽

Government Support ◽

Value Chains ◽

Labor Laws ◽

Role Of The State ◽

Economic Upgrading ◽

The Impact ◽

Abstract This article presents findings from field studies of smallholders and farmworkers producing coffee, mangoes, and rice in several countries in the global South. It is one of the few comparative studies of the constraints and opportunities for social upgrading in global agricultural value chains (gvcs). We argue that the ease with which new suppliers can be found gives highly concentrated global wholesalers and retailers enormous leverage over smallholders. As a result, opportunities for social upgrading tend to be limited. Even in successful cases, it is accompanied by fewer employment opportunities. Cooperatives, which enjoy government support and enforced labor laws, are an exception. The article begins with a discussion of problems in measuring the impact of gvc participation and a theoretical explanation of why economic upgrading is not sufficient to ensure social upgrading. Special attention is given to the role of the state in promoting social upgrading.

Challenges of achieving social upgrading in Bangladesh’s apparel industry

Society and Business Review ◽

10.1108/sbr-07-2018-0068 ◽

2018 ◽

Vol 15 (2) ◽

pp. 77-94 ◽

Cited By ~ 1

Author(s):

Mohammad Tarikul Islam ◽

Christina Stringer

Keyword(s):

Design Methodology ◽

Apparel Industry ◽

Value Chains ◽

Future Research ◽

Structured Interviews ◽

Content Type ◽

Lower Tier ◽

Economic Upgrading ◽

System Operating ◽

Purpose Despite substantial economic upgrading, Bangladesh’s apparel industry remains confronted by claims of precarious working conditions. This paper aims to understand the challenges of achieving social upgrading and whether benefits of economic upgrading can transfer to workers and their dependents through social upgrading. Design/methodology/approach Semi-structured interviews were undertaken with 90 participants from six apparel firms in Bangladesh. The interviews were conducted following the Rana Plaza disaster. Findings The results suggest that social upgrading has not occurred to the same extent as economic upgrading. Social upgrading has been compromised in part, by the tiered factory system operating and a lack of governance within the lower tier firms. Research limitations/implications Single country and one industry constitute the main limitations of this research. Future research could include multiple countries and industries to allow for greater generalization of findings. Originality/value The paper provides new insights on how social upgrading might be compromised within the global value chains context and its impact on developing country supplier firms, workers and their families.

Economic and Social Upgrading in Global Value Chains: Insights from Philippine Manufacturing Firms

Philippine Journal of Public Policy: Interdisciplinary Development Perspectives ◽

10.54096/ydyb1094 ◽

2018 ◽

Vol 2018 ◽

Author(s):

Adrian R. Mendoza

Keyword(s):

Statistical Significance ◽

Global Value Chains ◽

Labor Cost ◽

Value Chains ◽

Probit Regression ◽

Skilled Workers ◽

Labor Conditions ◽

Skill Intensity ◽

Economic Upgrading ◽

This study explores results of the 2012 Survey on Adjustments of Establishments to Globalization (SAEG) to analyze the economic and social upgrading experience of Philippine manufacturers within global value chains (GVCs). Three broad patterns emerge from the data. First, firms with stronger GVC linkages tend to have better labor indicators than purely domestic producers. Second, the majority of manufacturers either experienced or missed economic and social upgrading simultaneously. Lastly, almost all social upgrading is accompanied by economic upgrading but economic upgrading may take place without a social component. Against this background, this study uses bivariate probit regression to model the joint determination of the two separate but interconnected upgrading outcomes. The results indicate that the covariates in the model can be categorized based on their statistical significance: purely economic (i.e., employment size, unit labor cost, high skill intensity, and the Kaitz dummy), purely social (i.e., training, female intensity, and foreign equity), and both (i.e., contractualization, and process and product innovations). These results have several important implications. First, GVC firms’ notion of social upgrading is closer to the softer components of working conditions than to traditional measurable indicators such as employment, wages, and efficiency. Second, the results suggest direct and indirect channels through which technological upgrading may generate desirable social outcomes: the direct channel highlights that innovation should be accompanied by skills development to sustain higher value creation while the indirect channel underlines the potential of innovation to create upward spirals in output, productivity, and, ultimately, labor conditions. Lastly, there are some indications that the social benefits of economic upgrading may not be evenly distributed among different types of employment. Overall, the results emphasize the need for a holistic upgrading experience that shifts the country’s comparative advantage from cheap labor to innovative local industries and highly skilled workers.

Governance of Eswatini Apparel Regional Value Chains and the Implications of Covid-19

European Journal of Development Research ◽

10.1057/s41287-021-00383-3 ◽

2021 ◽

Author(s):

Giovanni Pasquali ◽

Shane Godfrey

Keyword(s):

Global South ◽

Value Chains ◽

Governance Structures ◽

Negative Consequences ◽

Private Governance ◽

Public Governance ◽

Firm Level ◽

Private And Public ◽

The Impact ◽

AbstractThere is a growing literature on the impact of Covid-19 on commercial and labour conditions at suppliers in apparel global value chains (GVCs). Yet much less is known about the implications for suppliers operating in regional value chains (RVCs) in the global South. In this article, we focus on Eswatini, which has grown to become the largest African manufacturer and exporter of apparel to the region. We draw on a combination of firm-level export data and interviews with stakeholders before and after the Covid-19 lockdown to shed light on the influence of private and public governance on suppliers’ economic and social upgrading and downgrading. We point to the coexistence of two separate private governance structures: the first characterised by direct contracts between South African retailers and large manufacturers (direct suppliers); the second operating through indirect purchasing via intermediaries from relatively smaller producers (indirect suppliers). While direct suppliers enjoyed higher levels of economic and social upgrading than indirect suppliers before Covid-19, the pandemic reinforced this division, with severe price cuts for indirect suppliers. Furthermore, while retailers provided some direct suppliers with support throughout the crisis, this was not the case for indirect suppliers, who remain comparatively more vulnerable. In terms of public governance, the negative consequences of the lockdown on firms’ income and workers’ livelihoods have been compounded by the state’s ineffective response. Our paper contributes to the research on RVCs in the global South, enhancing our understanding of how different governance structures and external shocks affect firms’ and workers’ upgrading and downgrading prospects.

Validating scales for economic upgrading in global value chains and assessing the impact of upgrading on supplier firms’ performance

Journal of Business Research ◽

10.1016/j.jbusres.2020.01.010 ◽

2020 ◽

Vol 110 ◽

pp. 144-159

Author(s):

Mohammad Tarikul Islam ◽

Michael Jay Polonsky

Keyword(s):

Global Value Chains ◽

Value Chains ◽

Economic Upgrading ◽

Global value chains, rising power firms and economic and social upgrading

Critical Perspectives on International Business ◽

10.1108/cpoib-03-2014-0018 ◽

2015 ◽

Vol 11 (3/4) ◽

pp. 319-339 ◽

Cited By ~ 65

Author(s):

Joonkoo Lee ◽

Gary Gereffi

Keyword(s):

Value Chain ◽

Multinational Enterprises ◽

Production Systems ◽

Value Chains ◽

Content Type ◽

Recent Developments ◽

Alternative Markets ◽

Economic Upgrading ◽

Rising Power ◽

Purpose – The purpose of this paper is to introduce the global value chain (GVC) approach to understand the relationship between multinational enterprises (MNEs) and the changing patterns of global trade, investment and production, and its impact on economic and social upgrading. It aims to illuminate how GVCs can advance our understanding about MNEs and rising power (RP) firms and their impact on economic and social upgrading in fragmented and dispersed global production systems. Design/methodology/approach – The paper reviews the GVC literature focusing on two conceptual elements of the GVC approach, governance and upgrading, and highlights three key recent developments in GVCs: concentration, regionalization and synergistic governance. Findings – The paper underscores the complicated role of GVCs in shaping economic and social upgrading for emerging economies, RP firms and developing country firms in general. Rising geographic and organizational concentration in GVCs leads to the uneven distribution of upgrading opportunities in favor of RP firms, and yet economic upgrading may be elusive even for the most established suppliers because of power asymmetry with global buyers. Shifting end markets and the regionalization of value chains can benefit RP firms by presenting alternative markets for upgrading. Yet, without further upgrading, such benefits may be achieved at the expense of social downgrading. Finally, the ineffectiveness of private standards to achieve social upgrading has led to calls for synergistic governance through the cooperation of private, public and social actors, both global and local. Originality/value – The paper illuminates how the GVC approach and its key concepts can contribute to the critical international business and RP firms literature by examining the latest dynamics in GVCs and their impacts on economic and social development in developing countries.

Economic upgrading in global value chains

Revista Brasileira de Inovação ◽

10.20396/rbi.v19i0.8654359 ◽

2020 ◽

Vol 19 ◽

pp. e020002

Author(s):

Marília Bassetti Marcato ◽

Carolina Troncoso Baltar

Keyword(s):

Value Added ◽

Global Value Chains ◽

Value Chains ◽

Economic Perspective ◽

Vast Literature ◽

Economic Upgrading ◽

Theoretical Apparatus ◽

Positive Spillovers ◽

This paper has critically documented a vast literature addressing the multi-layered outcomes associated with participating in global value chains (GVCs). In particular, this paper reviews and synthesizes the definitions and quantitative measures of one particular dimension of the GVC analysis that is two-fold: the economic and social upgrading. More specifically, we discuss the economic perspective of upgrading, which is usually associated with “moving into higher value-added stages”, and it is commonly assumed to be followed by positive spillovers regarding technology and productivity. This paper emphasizes the important diversity of definitions and measures within the GVC literature, considering it as a reflection, to a certain extent, of the absence of a systematic theoretical apparatus in the GVC literature. The paper concludes with some considerations on the role of policymakers in promoting social upgrading as an important topic in the GVC research agenda.

The COVID-19 Pandemic and its impact on the global labour market: an analysis of emerging trends (part two)

Level of Life of the Population of Regions of Russia ◽

10.19181/lsprr.2021.17.2.5 ◽

2021 ◽

Vol 17 (2) ◽

pp. 216-227

Author(s):

Yuri Odegov ◽

Anton Razinov

Keyword(s):

Labour Market ◽

Value Chains ◽

Rational Solutions ◽

Russian Economy ◽

Emerging Trends ◽

The World ◽

Working Age ◽

Employment Elasticity ◽

Coronavirus Infection ◽

In the context of the economic crisis caused by the spread of coronavirus infection, the global labour market has faced serious challenges, on the timeliness and effectiveness of the response to which the viability of the world economy today depends. The crisis is global in nature and has a significant impact on investment, global value chains, and international trade, with serious consequences not only for the economy but also for the working-age population in all countries of the world. The global economic turmoil caused by the coronavirus pandemic requires a thorough analysis of the scale of its consequences in order to determine the most rational solutions. A situation of uncertainty about the future, fear of devastating consequences, and pessimistic forecasts were the companions of the first days of the pandemic. This article provides the first estimates of the level of unemployment and employment in various countries of the world in 2020. The article is divided into two parts due to its large volume. The first part analyzed the impact of the COVID-19 pandemic on the level of employment in various countries of the world, its consequences for the global labour market in the context of changes in the income of employees, and the amount of time worked. The features of the adaptation of the labor markets of individual countries of the world, as well as the reasons for the differences in the dynamics of the unemployment rate in different regions of the world, are revealed. The calculations of the employment elasticity coefficient for GDP for a number of countries of the world are carried out, the analysis of the obtained values is carried out. The segments of the labour market that are most affected by the impact of the pandemic are identified. The second part of the article identifies the main trends inherent in the Russian labour market before the outbreak of the epidemic and the trends whose outlines became visible during its manifestation. The essence of the main changes that occurred due to the need to adapt to new conditions is revealed. The main differences from the mechanisms of selfregulation of the labour market, which appeared during the previous economic shocks, are revealed. The impact of the pandemic on informal employment in the Russian economy is considered

International trade: Research of the reasons for the fall

Voprosy Ekonomiki ◽

10.32609/0042-8736-2019-1-79-91 ◽

2019 ◽

pp. 79-91 ◽

Cited By ~ 2

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 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.

The Role of Migration in the Formation of Regional Labour Markets Amidst the Second Wave of Depopulation in Modern Russia

Voprosy statistiki ◽

10.34023/2313-6383-2020-27-6-26-36 ◽

2020 ◽

Vol 27 (6) ◽

pp. 26-36

Author(s):

A. V. Topilin ◽

A. S. Maksimova

Keyword(s):

Labour Market ◽

Oil And Gas ◽

Labour Markets ◽

Labour Migration ◽

Sample Surveys ◽

Balance Sheets ◽

Permanent Migration ◽

Regional Labour Markets ◽

The article reflects the results of a study of the impact of migration on regional labour markets amidst a decline in the working-age population in Russia. After substantiating the relevance of the issues under consideration, the authors propose a methodological analysis toolkit, the author’s own methodology for calculating the coefficients of permanent long-term external and internal labour migration in regional labour markets, and the coefficient of total migration burden. In addition, the authors provide an overview of the information and statistical base of the study. According to current migration records, data of Rosstat sample surveys on Russian labour migrants leaving for employment in other regions, regional labour resources balance sheets based on the calculated coefficients of labour market pressures, the authors analyzed the impact of migration on the Russian regional labour markets over the past decade. It revealed an increasing role of internal labour migration in many regions, primarily in the largest economic agglomerations and oil and gas territories. At the same time, the role of external labour migration remains stable and minimum indicators of the contribution of permanent migration to the formation of regional labour markets continue to decrease. It has been established that irrational counter flows of external and internal labour migration have developed, which indicates not only an imbalance in labour demand and supply but also a discrepancy between the qualitative composition of migrants and the needs of the economy. It is concluded that the state does not effectively regulate certain types of migration, considering its impact on the labour market. The authors justified the need for conducting regular household sample surveys according to specific programs to collect information about labour migrants and the conditions for using their labour. In addition to the current migration records, using interregional analysis, this information allows making more informed decisions at the federal and regional levels to correct the negative situation that has developed in the regional labour markets even before the coronavirus pandemic had struck.