Global value chains offer a new way for developing countries to industrialise. This column provides a deep examination of the pattern of developing countries’ integration in these chains and shows that changes in integration are increasingly driven by low- and middle-income countries, while the integration of high-income countries has begun to even out. It also shows that low- and middle-income countries are still more specialised in downstream activities and typically export less domestic value added.
Victor Kummritz, Bastiaan Quast, 25 February 2017
João Amador, Sónia Cabral, 23 December 2016
Global Value Chains have become the paradigm for the international organisation of production in almost all sectors. Bilateral gross trade flows no longer accurately represent interconnections among countries, so new methods of analysis are needed. Using tools of network analysis, this column assesses the roles of goods and services as both inputs and outputs in GVCs between 1995 and 2011 and examines the profile of Germany, the US, China and Russia as suppliers of value added.
Laurie Reijnders, Marcel Timmer, Xianjia Ye, 25 October 2016
Offshoring and biases in technical change can have observationally equivalent effects on domestic labour demand, which precludes a quantification of their relative impacts. This column shows how biased technical change can be identified by studying global value chains that include all stages of production, both at home and abroad. It finds that technical change has been strongly biased against less-skilled workers, and in favour of high-skilled labour and capital.
Hylke Vandenbussche, Christian Viegelahn, 02 October 2016
In a world where production is increasingly fragmented across borders, a large number of firms import their raw material inputs from abroad. This column investigates how firms’ input and output choices are affected by import tariffs on inputs that domestic firms use in production. Based on firm-product level data for India, it finds that firms decrease their use of inputs subject to the tariff, relative to other inputs. Firms also decrease their sales of outputs made of these inputs, relative to other outputs.
Masayuki Morikawa, 23 June 2016
The shifting balance between manufacturing and service industries in developed economies has significant implications for long-term growth and international trade. This column uses Japanese firm-level data to analyse the impact of ‘factoryless goods producers’ on overall productivity. As these producers specialise in tasks in which advanced economies have a comparative advantage, it is anticipated that when combined with falling production costs and trade liberalisation, they will contribute to economic growth.
Cristina Constantinescu, Aaditya Mattoo, Michele Ruta, 25 May 2016
Trade has been growing more slowly since the Great Recession not only because global GDP growth is lower, but also because trade itself has become less responsive to GDP. The causes of the changing trade-income relationship have been studied, but its consequences have not. This column presents a simple framework to assess some of the demand-side and supply-side implications. The change hurts growth, although the quantifiable effects are not large.
João Amador, Filippo di Mauro, 09 September 2015
There is an urgent need for policymakers to fully acknowledge the extent to which conventional indicators related to gross trade are severely flawed as policy benchmarks because they fail to take into account the existence of global value chains and their increasing role in shaping the global economy. This column, which introduces a new Vox eBook, urges academics to start proposing workable indicators that are systematically produced and readily available.
Bernard Hoekman, 24 June 2015
The world’s trade-to-GDP ratio climbed steadily for six decades. The rise slowed even before the Global Crisis and world trade growth has been anaemic since 2010. Recent data shows it declining, leading some to wonder whether global trade has peaked. This column introduces a new eBook that examines the issue from a wide range of perspectives. No consensus emerges but it is clear that this is not just a cyclical issue – something structural changed.
Timothy Sturgeon, 20 May 2015
With global value chains that fragment production across the world, national statistics fail to capture the growing interconnectedness of economies. This column describes the international input-output tables that allow researchers to estimate the share of a country’s export value derived from imported inputs. However, while these tools offer promising uses, at the moment statistics on trade in value added should be treated with great caution.
Dario Fauceglia, Andrea Lassmann, Anirudh Shingal, Martin Wermelinger, 18 February 2015
The sharp appreciation of the Swiss franc has once more raised fears about negative export growth and resulting losses for Swiss exporters. However, this column suggests that the Swiss economy’s high level of integration into global value chains potentially mitigates these negative effects by rendering imported intermediate inputs cheaper, thus reducing pressures on profit margins through the imported inputs channel.
Gary Gereffi , Xubei Luo, 14 June 2014
The explosion of trade in intermediate goods has created new development opportunities, but many of the jobs at the bottom of global value chains are low-paid, insecure, and dangerous. This column argues that participation in global value chains brings risks as well as opportunities. The gains from ‘moving up the global value chain’ are not equally distributed – large, professional, high-tech firms with diversified export markets, and high-skilled workers with formalised contracts benefit the most.
Demián Dalle, Verónica Fossati, Federico Lavopa, 13 April 2014
Discussions of global value chains (GVCs) have permeated international organisations’ research and policy agendas. This column presents a critical view on some of the recent policy recommendations that urge for as much liberalisation of trade in goods and services as possible. These proposals cannot be automatically applied to developing countries without some type of government intervention.