The Age of Global Value Chains: Maps and Policy Issues

João Amador, Filippo di Mauro 09 July 2015

Global value chains (GVCs) - referring to the cross-border flows of goods, investment, services, know-how and people associated with international production networks - have transformed the world. Their emergence has resulted in a complete reconfiguration of world trade, bearing a strong impact on the assessment of competitiveness and economic policy. The contributions to this eBook are based on research carried out within the scope of the Eurosystem Competitiveness Research Network (CompNet), bringing together participants from EU national central banks, universities and international organisations interested in competitiveness issues. The mapping of GVCs and full awareness about their implications are essential to informed public debate and improved economic policy.

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About the contributors    vi

Foreword    xii

Introduction    13
João Amador and Filippo di Mauro

Part I Mapping global value chains

Foreign value added in Eurozone exports    24
João Amador, Rita Cappariello, Robert Stehrer

Global value chains: ‘Factory World’ is emerging    36
Bart Los, Marcel Timmer and Gaaitzen de Vries

Factor specialisation within global value chains     48
Bart Los, Robert Stehrer, Marcel Timmer and Gaaitzen de Vries

A basic network perspective    58
João Amador and Sónia Cabral

Networks and structural integration in global value chains    68
Gianluca Santoni and Daria Taglioni

Global value networks    85
Carlo Altomonte, Italo Colantone, Armando Rungi and Tommaso Sonno

Part II Impacts of global value chains

Global value chains, labour markets and productivity    107
João Amador and Sónia Cabral

Global value chains  and the great collapse in value added trade    121
Arne J. Nagengast and Robert Stehrer

The trade and demand nexus: Do global value chains matter?    132
Alexander Al-Haschimi, Frauke Skudelny, Elena Vaccarino and Julia Wörz

The interpretation of changes in global market shares: Adding the global value chain dimension    148
Konstantins Benkovskis and Julia Wörz

On the interpretation of trade imbalances    163
Arne J. Nagengast and Robert Stehrer

Part III The firm-level dimension

Firms’ engagement in global value chains    174
Iulia Siedschlag and Gavin Murphy

Global value chains and multinational activity with financial frictions    187
Kalina Manova

Appendix – Analysis of global production networks: Approaches, concepts and data    201

Bart Los and Marcel Timmer

João Amador

Head of the Fiscal Policies and Structural Studies Division at the Economics and Research Department, Banco de Portugal; Assistant Professor, Nova School of Business and Economics

Filippo di Mauro

Chairman of CompNet

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CEPR Policy Research