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).

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 chains in the MedTech industry

2019 ◽  
Vol 15 (1) ◽  
pp. 70-92
Author(s):  
Jana Vlckova ◽  
Bublu Sarbani Thakur-Weigold
Keyword(s):  
Czech Republic ◽  
Core Competencies ◽  
Value Added ◽  
Global Value Chains ◽  
Business Environment ◽  
Economic Outcomes ◽  
Weak Links ◽  
Value Chains ◽  
The Czech Republic ◽  
Content Type

Purpose Medical technology (MedTech) is a growth industry, which like other manufacturing sectors has undergone fragmentation of production and emergence of Global Value Chains (GVCs). The purpose of this paper is to compare how two open European economies position themselves competitively within MedTech GVCs: highly developed Switzerland and the emerging Czech Republic. Design/methodology/approach The research applies a mixed methodology to analyze the performance of each location in the MedTech GVCs. It draws on macroeconomic, industry, trade and a proprietary sample of firm data, combined with onsite interviews. Findings The economic outcomes and GVC positions differ in both cases, whereas Switzerland focuses on high value-added activities such as R&D and after-sales service. Specialized manufacturing is also located here in spite of high costs. By contrast, the Czech Republic focuses mostly on low value-added activities, like manufacturing disposables, although some domestic innovative companies are notable. The authors generalize four types of firms in the industry, comparing their presence in both locations. Practical implications The competitive positions and challenges faced by each location when engaging in MedTech GVCs are summarized and related to economic outcomes. In the Czech Republic, the barriers to upgrading include its business environment, and weak links between education institutions and industry. Switzerland’s high cost structure is offset by adding high value in core competencies. Both countries should protect the inherent advantage their locations offer within responsive European supply chains. Originality/value GVC research in the MedTech sector has been limited. There is no comparison of two European countries, and their position in MedTech GVCs, nor of how firms, participate successfully in them.

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.

scholarly journals Labor Costs and Localization in Global Value Chains: Comparative Analysis and Conclusions for Poland

2019 ◽  
Vol 11 (1) ◽  
pp. 229-238
Author(s):  
Magdalena Kapela
Keyword(s):  
Value Chain ◽  
Great Part ◽  
Value Added ◽  
Work Force ◽  
Global Value Chains ◽  
Qualitative Assessment ◽  
Value Chains ◽  
Global Value Chain ◽  
Labor Costs ◽  
Technology Industries

AbstractLabor costs in Poland are relatively low in comparison to other European Union (EU) countries. After long period of functioning Poland in closed economy, conditions significantly weakened the level of its competitiveness in the international market. When the boards were opened in 1989, it became clear that cheap work force was one of the most important factors to attract foreign investments. At the same time, globalization and internationalization of production created opportunity for entrepreneurs to establish global value chains. Participation in global value chain (GVC) of Poland can extend international trade and increase gross domestic product (GDP). On the other hand, low wages attract investments in low-technology industries and, moreover, place Poland in the middle of value chains, where semi-products are assembled and new value added is exiguous. The aim of the article is: 1) to present polish participation in global value chain, 2) to analyze how much low labor costs contribute to degree of share in global value chain, and 3) to show how level of labor costs contribute to position in value chain and how does it influence on benefits from participating in GVC. In the article, the quantitative and qualitative assessment of Eurostat (European statistic) and Organisation for Economic Cooperation and Development (OECD) statistics data and research on labor costs carried out in Poland were analyzed. The research tools include a critical analysis of literature and descriptive analytical method. More than 50% of polish exports takes place within the global value chains. Low labor costs attract investors to allocate part of their production in Poland. Nevertheless, great part of export constitutes semi-products that do not create new value added so benefits from participation in GVC are not so considerable as expected. It is desirable to shift Poland toward beginning or the end of value chains, where profits are higher.

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.

Turkey's Participation and Economic Upgrading in Global Value Chains

2016 ◽  
pp. 418-468
Author(s):  
Seda Koymen Ozer ◽  
Daria Taglioni ◽  
Deborah Winkler
Keyword(s):  
Value Chain ◽  
Direct Investment ◽  
Value Added ◽  
Global Value Chains ◽  
Manufacturing Firms ◽  
Value Chains ◽  
Domestic Economy ◽  
Economic Upgrading ◽  
Key Industries ◽  
Technological Intensity

This chapter assesses Turkey's position in global value chains (GVCs) and identifies the conditions under which the country can better exploit the advantages from GVC participation, in particular how the country can economically upgrade its GVC position by reaping the benefits of spillovers to the domestic economy. The chapter reviews Turkey's participation in three key industries: the automotive sector, the textiles and apparel sector, and the agri-food sector. The results show that Turkey is relatively present in GVCs. However, the country seems to specialize in assembly and low value added segments of the value chain. It is also important to evaluate the spillovers from foreign direct investment (FDI) to the domestic economy. The results show that high R&D expenditure and/or a high technological intensity are beneficial for Turkey's manufacturing firms. In addition, supplying fully foreign-owned companies significantly helps boost the productivity of domestic firms.

scholarly journals Slicing Up Global Value Chains

2014 ◽  
Vol 28 (2) ◽  
pp. 99-118 ◽  
Author(s):  
Marcel P. Timmer ◽  
Abdul Azeez Erumban ◽  
Bart Los ◽  
Robert Stehrer ◽  
Gaaitzen J. de Vries
Keyword(s):  
Value Chain ◽  
Production Systems ◽  
Value Added ◽  
Global Value Chains ◽  
Value Chains ◽  
Skilled Labor ◽  
Skilled Workers ◽  
Strong Shift ◽  
Starting Point ◽  
Fragmentation Of Production

In this paper, we “slice up the global value chain” using a decomposition technique that has recently become feasible due to the development of the World Input-Output Database. We trace the value added by all labor and capital that is directly and indirectly needed for the production of final manufacturing goods. The production systems of these goods are highly prone to international fragmentation as many stages can be undertaken in any country with little variation in quality. We seek to establish a series of facts concerning the global fragmentation of production that can serve as a starting point for future analysis. We describe four major trends. First, international fragmentation, as measured by the foreign value-added content of production, has rapidly increased since the early 1990s. Second, in most global value chains there is a strong shift towards value being added by capital and high-skilled labor, and away from less-skilled labor. Third, within global value chains, advanced nations increasingly specialize in activities carried out by high-skilled workers. Fourth, emerging economies surprisingly specialize in capital-intensive activities.

World Economy as Global Value Chain’s Network

2015 ◽  
pp. 5-17
Author(s):  
V. Kondrat’ev
Keyword(s):  
Value Chain ◽  
Financial Services ◽  
Industrial Development ◽  
Full Range ◽  
Global Value Chains ◽  
Motor Vehicles ◽  
Value Chains ◽  
Business Services ◽  
Specific Product ◽  
Fragmentation Of Production

World trade and production are increasingly structured around “global value chains” (GVCs). A value chain identifies the full range of activities that firms undertake to bring a product or a service from its conception to its end use by final consumers. Technological progress, cost, access to resources and markets and trade policy reforms have facilitated the geographical fragmentation of production processes across the globe according to the comparative advantage of the locations. This international fragmentation of production is a powerful source of increased efficiency and firm competitiveness. Today, more than half of world manufactured imports are intermediate goods (primary goods, parts and components, semi-finished products), and more than 70% of world services imports are intermediate services. The emergence of GVCs during the last two decades has implications in many areas, including trade, investment and industrial development. Some of these implications have been explored in recent OECD work but the empirical evidence on GVCs remains limited. The last few years have witnessed a growing number of case studies on the globally integrated value chains at the product level, but such analyses only depict the situation for a specific product. The main objective of the article is to provide more and better evidence allowing to examine the position of countries within international production networks. The author deals with quantitative indicators that give a more accurate picture of the integration and position of countries in GVCs. A detailed assessment of global value chains is provided in six industries: agriculture and food products, chemicals, electrical and computing machinery, motor vehicles, business services, financial services.

GLOBAL VALUE CHAINS (GVCS) AND ECONOMIC GROWTH: A NONLINEAR ANALYSIS

2021 ◽  
pp. 1-20
Author(s):  
ZHUQING MAO
Keyword(s):  
Economic Growth ◽  
Value Chain ◽  
Value Added ◽  
Global Value Chains ◽  
Value Chains ◽  
Middle Income ◽  
Linear Pattern ◽  
The Relationship ◽  
Local Value ◽  
Nonlinear Pattern

This study examines the relationship between economic growth and participation in global value chains (GVCs) and demonstrates that the U-shaped nonlinear pattern of GVCs could be more effective than the simple linear pattern of GVCs in terms of economic growth in high- and middle-income economies. The U-shaped nonlinear pattern expresses that there are decreasing foreign-dominated GVCs (increasing high value-added domestic value chains) for building local value chain and then raise the GVCs participation to benefit at a better position in GVCs. This paper investigates a panel of 63 advanced and emerging economies and obtained significant evidence by using systemic quantitative analysis. This research suggests that emerging markets should decrease foreign-dominated GVCs (increase high value-added domestic value chain) and then raise the participation of the GVC for economic growth.

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