Global value chains and international development policy: Bringing firms, networks and policy-engaged scholarship back in

Abstract

This article argues that the global value chains (GVC) perspective bridges the firm-specific, private-sector and country-level, societal divide that has separated the international business and international economics literatures. A key mechanism that explains the policy impact of the GVC approach are the networks created between the policy entrepreneurs inside the international organizations (IOs) dealing with economic development and the idea entrepreneurs in the research community. The policy engagement of various segments of the GVC research community with development-oriented IOs has increased the scope and visibility of the GVC literature, and improved the quality and relevance of the findings from selected GVC research programs. However, one of the drawbacks of this collaboration has been the multiple meanings attached to the GVC concept and its policy usages within the IOs and national policy communities. The GVC framework remains centrally involved in contemporary research frontiers, including the impact of tariffs on national competitiveness and innovation systems, the digital economy, the future of manufacturing, the co-evolution between local economic clusters and global production networks, and the role of foreign direct investment in establishing complete value chains as a catch-up strategy in developing economies.