Method of value chain mapping with international input\u2013output data: application to the agricultural value chain in three Greater Mekong Subregion countries

Ikuo Kuroiwa

doi:10.1186/s40008-021-00235-7

Abstract

Extending the technique of unit structure analysis, which was originally developed by Ozaki (J Econ 73(5):720–748, 1980), this study introduces a method of value chain mapping that uses international input–output data and reveals both the upstream and downstream transactions of goods and services, as well as primary input (value added) and final output (final demand) transactions, which emerge along the entire value chain. This method is then applied to the agricultural value chain of three Greater Mekong Subregion countries: Thailand, Vietnam, and Cambodia. The results show that the agricultural value chain has been increasingly internationalized, although there is still room to benefit from participating in global value chains, especially in a country such as Cambodia. Although there are some constraints regarding the methodology and data, the method proves useful in tracing the entire value chain.

Highlights

Participation in global value chains (GVCs) has become increasingly important as a strategy for economic development in less developed countries
The three countries—Thailand, Vietnam, and Cambodia—are in different stages of industrial development and their agricultural value chains can be situated in different positions with regard to the development of regional production networks
Rapid progress in regional cooperation and integration has been observed since the early 1990s because the ASEAN Free Trade Area (AFTA) agreement, which comprised Thailand and other older ASEAN member countries, was signed in 1992; Vietnam and Cambodia joined AFTA in 1995 and 1999, respectively

Summary

Introduction

Participation in global value chains (GVCs) has become increasingly important as a strategy for economic development in less developed countries. Sequences of structural transformation occur in industries, such as upgrading from (i) consumer to intermediate and capital goods and (ii) technologically simple products to complex and sophisticated ones This sequence of industrial development has become vague because of the expansion of GVCs. a developing country can ascend into GVCs for sophisticated products, including high-tech products, by specializing in a niche segment of the value chain and becoming an exporter of these products. A developing country can ascend into GVCs for sophisticated products, including high-tech products, by specializing in a niche segment of the value chain and becoming an exporter of these products This phenomenon has occurred because of the rapid decline in trade and communication costs caused by Kuroiwa Economic Structures (2021) 10:6 technological development, trade liberalization, and regional integration. The globalization of the economy, spurred by trade liberalization and economic integration, has narrowed the policy space for developing countries, making it increasingly difficult to protect infant industries

Methods

Results

Conclusion