The Age of Global Value Chains Maps and Policy Issues (original) (raw)
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The Impact of Global Value Chains on the Euro Area Economy
SSRN Electronic Journal, 2019
Introduction and main findings 1 1.1 The importance of global value chains for the euro area Production processes are nowadays structured in several stages, which often take place in more than one country. To manufacture a final product, firms source intermediate inputs from a number of providers, and in many cases these providers are located abroad. Value is added at each stage of the production process, and products might cross borders several times before being finally consumed. This kind of international production sharing arrangement is known as a "global value chain" (GVC). Box 1 provides some key definitions and measures. Efficiency motives and cost considerations are behind the decisions taken by firms to use foreign inputs or to locate production stages-including final assembly-overseas. A classic example of a global production chain is the manufacture of a smartphone. Research and development of the smartphone might take place in an advanced economy, while the final product is assembled where labour costs are comparatively low (e.g. China), and components, such as semiconductors and processors, are provided by countries that specialise in producing them, such as South Korea and Japan. Each of the countries involved in the production process contributes-albeit in different proportions-to the total value added of the final product. However, trade statistics on the value of shipped products do not reflect each country's individual contribution to a product's value. The decline in transportation and transaction costs, the increase in openness of emerging market economies and the removal of trade barriers have all helped to drive the development of GVCs. Technological advances have allowed firms to unbundle production processes and to reduce coordination costs by facilitating communication. At the same time, improvements in transportation and logistics have dramatically lowered trade costs. In addition, the establishment of the World Trade Organization (WTO) and, in particular, the accession of China to the WTO and the ensuing free-trade agreements have-at least until recently-mitigated or even removed impediments to trade such as tariff and non-tariff barriers. 2 Box 1 GVCs: measures of participation and position, and related datasets Recent strands of the literature on GVCs have made use of global input-output tables to trace value-added flows through the various stages of production. 3 The first goal is to decompose gross export flows of goods and services in order to disentangle the sources of value added from what merely constitutes back-and-forth trade in intermediate products ("double-counting"). 4 Figure A 1 By Ettore Dorrucci and Vanessa Gunnella. For an introduction to global value chains, see also ECB (2017a) and ECB (2017b). 2 See Baldwin (2016) for further details.
Global Value Chains and the Slowing Down of Globalisation
Perspectivas - Journal of Political Science
Global value chains (GVCs) have been a major feature of the phase of economic globalisation that began after the 1980s. After the global financial crisis of 2007-08, however, this phase has come to an end, being replaced by one characterized by a significant slowdown in the degree of international economic openness, due to not only economic but also geopolitical reasons.. GVCs have also shown a slowing growth trend after then. The future scenarios for GVCs, however, suggest the possibility that they may be more resilient than expected. A first theoretical explanation provided in the literature argues that the reshoring of foreign intermediate production would be prevented by the high sunk costs that would have to be incurred. However, an additional possible reason for GVCs resilience - this is the main theoretical contribution of this article - is due to the option of friendshoring or nearshoring, rather than reshoring. Moving the production to more suitable foreign destinations, ch...
Changes of Global Value Chains in the Industrial Production Sector
Economic globalisation causes increasing international fragmentation of value added chains, whereby companies outsource components of production to foreign markets. These conditions have changed the way of manufacturing organization and the method of measuring international trade. The aim of this paper is the conceptualization of terms such as dematerialisation, deindustrialisation, delocalisation and reindustrialisation of industrial production as well as the global value chain. Followed by analysis of participation of selected economies in global value chains.
Global Value Chains. The new reality of external trade
Positive and negative effects of European Union and Eurozone enlargement PONE , 2014
The present paper is related to the new view on external competiveness, namely Global Value Chains (GVCs) analysis of external trade flows. It is shown that due to increased globalization, intensification of trade in intermediate goods, activities' fragmentation and higher integration in the production chain, the gross export values do not offer a loyal picture of the competitive abilities of nations. We make a comprehensive review of the recent literature focusing on GVCs, as well as an in-depth analysis of the databases introduced by international institutions for measuring the degree of countries' integration in GVCs (for example WIOD, developed by European Commission and World Trade Organization). We also show how the emergence of GVC can distort traditional competitiveness indicators, especially those related to Revealed Comparative Advantage and Real Effective Exchange Rate. We argue that for increasing the efficiency of measures aimed at increasing competitiveness, policy makers must take into account the new reality of external trade, as highlighted by countries' position within GVCs. Policy options are formulated for the case of Romania, which might not have fully taken advantage by the benefits of participating in a favorable position in the GVCs.
Global Value Chains and Industrial Policies
2016
This paper has been produced under the E15Initiative (E15). Implemented jointly by the International Centre for Trade and Sustainable Development (ICTSD) and the World Economic Forum, the E15 convenes world-class experts and institutions to generate strategic analysis and recommendations for government, business and civil society geared towards strengthening the global trade system. For more information on the E15, please visit www.e15initiative.org The Expert Group on Global Value Chains: Development Challenges and Policy Options is co-convened with the Inter-American Development Bank (IADB). www.iadb.org/ With the support of:
Global Value Chains: Implications for the Austrian economy
2015
This study focuses on the implications of rising global value chains (GVCs) on international trade and analysis the impacts on small open economies. Small open economies rely heavily on international trade and are highly integrated in global production networks but have so far been hardly considered in the literature. On the example of Austria, an industrialized small open economy in central Europe, we addressed the role of small open economies in a globalized economy. Based on the WIOD database we apply network analysis and use GVC as well as competiveness indicators to measure the associated risks as well as benefits. Findings imply for Austria a sharp turn in the focus of trade policy away from the traditional gross trade perspective. Austria’s competitiveness has been strengthened considerably via the participation in GVCs since resource and endowment constraints have been overcoming easier and foreign inputs are used in the production processes efficiently enabling vast economi...
Central European Economic Journal, 2017
The pattern of trade of the Central and Eastern European countries has been changing since the beginning of the economic transition in the early 1990s. By the end of the century this process was additionally strengthened by their integration with the European Union and overlapped with the development of global value chains (GVC) spanning across Europe with which the new member states (NMS) have become increasingly integrated.In this paper, we shed light on these changes by analysing the position of the NMS within the global value chains. We employ the upstreamness measure proposed by Antràs et al. (2012) and use the World Input–Output Database. Although we observe a global increasing trend in the upstreamness of all countries, we find that the NMS have in many cases gone against this trend while converging in their production structure within their group and with the EU-15. This convergence is mostly observed in Czech Republic, Hungary, Poland and Slovakia where the level of upstrea...
A Framework to Analyze the Position of European Firms in Global Value Chains
2020
This document has been prepared for the European Commission however it reflects the views only of the authors, and the Commission cannot be held responsible for any use which may be made of the information contained therein. More information on the European Union is available on the Internet (http://www.europa.eu).
Revista Apuntes, 2017
Since the 1970s, the global economic geography underwent major transformations of its production processes. One of the most important causes was the increasing internationalization and segmentation of production , giving rise to what are known as " global value chains " (GVCs). The aim of the paper is to explain the main changes in GVCs since the 1990s, identifying the countries and sectors that are most active in GVCs and whose participation has increased the most since the 1990s in absolute and relative terms; and to analyze whether or not there is a relationship between economic development and participation in CGVs.