Context Of Global Value Chains Research Articles

MAQUILADORA INDUSTRY ON MEXICO'S NORTHERN BORDER

This paper analyzes the consolidation process of maquiladora industry in Mexico's northern border, based on the expansion context of Global Value Chains (GVC) and Foreign Direct Investment (FDI) as forms of lowering production costs. Having arrangements like the North American Free Trade Agreement (NAFTA) as an institutional background, there is a growing presence of Multinational Corporations (MNCs) and the expansion of maquiladoras as a national export-led model, mainly composed by manufactures. Through socioeconomic data analysis, we demonstrate two aspects concerning the evolution of maquiladora industry in Mexico: Job creation is related to inferior wage levels with a low improvement throughout history, which may interfere on the social reproduction of labor force; It follows the rise in undocumented immigration to the United States, creating a tighter and onerous institutional response on border control as an attempt to contain the migratory flows. 

Kyoto Protocol and global value chains: Trade effects of an international environmental policy

Deepening globalization and international fragmentation of production (IFP) have provided an appropriate foundation for offshore production processes to exploit comparative advantage wherever possible. Unilateral environmental regulations can increase the outsourcing probability of polluting production processes in regions with looser environmental regulations and can consequently alter trade patterns by changing comparative advantage. The Kyoto Protocol (KP) is considered as one of the international but unilateral environmental regulations for coping with climate changes. This protocol was implemented to mitigate emissions in industrial economies, and its potential side effects such as production relocation have always been controversial. Therefore, this study aimed to estimate the impacts of the KP on trade patterns of the ratifying countries within the context of global value chains (GVCs). For this purpose, the difference-in-differences (DiD) regression and the generalized synthetic control method (GSCM) were used to model the panel data during 1990–2017. The estimation results indicated that the KP ratification decreased the forward participation of the committed countries, while increased their backward participation. As a result, it deepened their relative downstream positions in the GVCs. Accordingly, the KP reduced the share of intermediate goods and services exports in committed countries that ratified KP but increased the share of foreign intermediate goods and services in their exports. In addition, some environmental implications and outcomes of these results, especially for the Paris Agreement, were discussed.

Trade specialization and performance in global value chains

Abstract This article investigates whether trade specialization explains economies’ trade performance within the context of global value chains (GVCs). We consider trade specialization in natural resources (NR), high- and low-tech manufacturing (LTM and HTM) and business services, before and after the financial crisis. The aimed contribution of this article is to shed light on the effects of trade specialization as measured in domestic value added embodied in exports rather than gross exports. We add to the literature on GVCs by (i) studying the role of the domestic productive structure in countries’ trade specialization and performance, (ii) accounting for the rate of changes in trade specialization as affecting GVC performance. We employ Balassa indexes based on value added flows in a GMM dynamic panel framework. Our results suggest that trade specialization in LTM and NR relate to a decline in the growth of domestic value-added per capita exports relative to other countries. HTM and knowledge-intensive business services exhibit a positive effect during the crisis period. We discuss these findings in relation to the recent debates on the role of manufacturing and premature de-industrialization in developing countries.

Importing under trade policy uncertainty: Evidence from China

This paper empirically explores the adjustment of imports to reductions in trade policy uncertainty (TPU), taking into account that firms may face large sunk costs when purchasing foreign goods. We investigate how product-level Chinese imports react to tariff binding arising from China's accession to the WTO, by distinguishing both country-related and firm-related margins. Our main results suggest that a decline in TPU allows access to a greater variety of foreign goods, that are also associated with higher quality. At the same time, tariff binding leads more Chinese producers and trade intermediaries to start importing, thus allowing a greater number of firms and consumers to enjoy potential gains from imports. Finally, we document heterogeneous TPU effects across firms with different ownership, as well as across products with different end use, revealing interesting insights into the context of global value chains.

Prices of Value Added and Competitiveness in Global Value Chains

Measuring international competitiveness is a highly contested issue in contemporary economics. The emergence of global value chains limits the accuracy of traditional export-based measures and calls for the employment of techniques capable of accounting for value added input of individual economies into global production and trade. The paper aims to contribute to the global value chains literature by developing a framework both for distinguishing diverse modes of competitiveness and for the identification of successful cases of upgrading. It adapts an established method of export price comparisons to the context of global value chains and proposed a bi-dimensional technique based on the dynamics of the volumes and prices of GVC Income. As it concerns the technical side of the paper, it takes advantage of an input-output analysis and additive decomposition technique in order to disentangle the value-added-based measure of GVC Income, as well as the prices and volumes components of its dynamics. Empirical analysis, based on World Input-Output Database, demonstrates that countries di er signi cantly not only in terms of total GVC income dynamics, but also in terms of the modes chosen to build their competitive position in the global economy. In particular, upgrading throughout the period was achieved only by a few Central, Eastern European and emerging countries. The chances of successfully upgrading changed drastically in time, with the stage of the global business cycle and the balance between global demand and supply. In particular, catching-up possibilities by upgrading, strong in early 2000's, decreased signi cantly after the Economic Crisis. The key reason, next to weak demand, that stands behind these developments is the impressive expansion of China, which has been on an upgrading path since 2005.

Basics of Optimization Strategy for Integrating Space Industry Technology Package Into Global Value Chains

Abstract The article deals with basic characteristics and fundamentals of innovation management of global value chains and considerations on the example of space industry based on the factor of interaction in the creation of new products in global value chains. General context of global value chains as a factor of strategy development and characteristics and factors of global value chains in space industry is considered. Mechanism of the development of space engineering as global industry at the national level is proposed. The author proposes to consider four groups of level of characteristics of the competitiveness of technological component for integration into the global value chain of space industry projects.