Published: Friday, 24 June 2016 18:35
Written by Bruno Carballa Smichowski, Cédric Durand and Steven Knauss
Two different groups are currently using the Global Value Chains (GVC) framework. On the one hand, policy institutions provide the standard measurements of GVC involvement and realize cross-country analysis to formulate policy recommendations. On the other hand, scholars from various disciplines elaborate on GVCs and GVC-related concepts (Antràs, 2014; Milberg and Winkler, 2013; Ponte and Sturgeon, 2014; Yeung and Coe, 2015a). Unfortunately, the former group (policy institutions) is often conducting its measurements with at best a rough and imprecise link to the recent achievements of academic theorists. As stated by Gereffi, “much of the literature that uses the GVC moniker misses the point and doesn’t apply the framework consistently” (Gereffi, 2014, p. 27). Meanwhile most of the academic scholars have not yet managed to address the theoretical challenges associated with new empirical discussions and policy debates. Since critical views on GVCs are usually made by theorists, there is a need to forge concepts that could be mobilized in order to provide empirical support to critical approaches to GVCs.
This contribution proposes to overcome this disjuncture between theory, on the one side, and macro, multi-country measurements, on the other. It offers some original findings concerning the relation between countries’ GVC participation and economic and social upgrading.
The second section addresses the limitations of GVC theorization and measurement and proposes to conceptualize GVCs as a specific form of the division of labor, distinct from both a market-led social division of labor and the internal organization of labor inside of firms. One achievement of this definition is to allow for a precise delimitation of the frontiers of GVCs and, accordingly, to propose more appropriate measures of GVC participation and value capture than currently employed (section 3), along with presenting some stylized facts based on these measures, which do not support the narrative of international institutions concerning GVC participation and economic upgrading (section 4). We then draw on various strands of literature to delineate 3 country development patterns depending on the modalities and intensity of GVC participation and independently of the products traded (section 5). Relying on trade data and standard indicators of economic and social upgrading (investment rates, value capture, median income, labor share, Gini index, employment rate) from the OECD, the IMF, the Luxembourg Income Study, UNCTADstat, the World Bank and supplemental sources, we realize a principal component analysis for 51 countries between 1995 and 2008 (section 6). Our results discussed in section 7 challenge the dominant narrative of a clear positive relation between GVC participation and social and economic upgrading, and instead describe a much more nuanced and contrasted relationship that reflects the unevenness of development patterns along GVCs.