Mechanics of Global Value Chains: India's Perspective

Dutta, Sourish (2017): Mechanics of Global Value Chains: India's Perspective.

Abstract

The global production as a system of creating values is eventually forming a vast web of value chains. It explains the transitional structures of world trade and development of the world economy. It is truly a new wave of globalisation, and we term it as the global value chains (GVCs), creating the nexus among firms, workers and consumers around the globe. The emergence of this new scenario raises some crucial questions. It asks how an economy's businesses, producers and employees are connecting to the global economy. How are they capturing the gains out of it regarding different dimensions of economic development? Indeed, this GVC approach is very crucial for understanding the organisation of the global industries and firms. It requires analysing the statics and dynamics of different economic players involved in this complex global production network. Its widespread notion deals with diverse global, regional, and local issues from the top-down to bottom-up, building scope for policy analysis. In this context, this study will attempt to quantify the extent and impacts of India's engagement in GVCs, based on available data. It will also strive to propose a comprehensive strategic framework to identify the objectives of India's GVC participation and development with some suitable economic strategies to achieve them.

• Item Type: MPRA Paper
• Language: English
• Keywords: Global Value Chains, Global Production Network, International Trade
• Subjects: F - International Economics > F0 - General; F - International Economics > F1 - Trade; F - International Economics > F2 - International Factor Movements and International Business

References

ACET (2014), African transformation report: Growth with depth, Technical report, African Center for Economic Transformation, Accra, Ghana: ACET.

Antràs, P. & Chor, D. (2013), ‘Organizing the Global Value Chain’, Econometrica 81(6), 2127–2204. Antràs, P. & Yeaple, S. R. (2015), ‘Multinational Firms and the Structure of International Trade’, Handbook of International Economics 4, 55–130.

Antràs, P. (2016), Global Production: Firms, Contracts, and Trade Structure, Princeton University Press. Baldwin, R. & Lopez-Gonzalez, J. (2015), ‘Supply-chain trade: A portrait of global patterns and several testable hypotheses’, The World Economy 38(11), 1682–1721.

Baldwin, R., Venables, A. J. & Bridgman, B. (2012), ‘Global supply chains: Why they emerged, why they matter, and where they are going’, Journal of International Economics 90(1), 245–254.

Breznitz, D. & Murphree, M. (2011), Run of the red queen: Government, innovation, globalization, and economic growth in China, Yale University Press.

Buciuni, G., Coro’, G. & Micelli, S. (2013), ‘Rethinking the role of manufacturing in global value chains. An international comparative study in the furniture industry’, Industrial and Corporate Change pp. 1–30.

Buciuni, G., Micelli, S. et al. (2014), ‘Rethinking the role of manufacturing in global value chains: an international comparative study in the furniture industry’, Industrial and Corporate Change 23(4), 967–996.

Calì, M., Francois, J., Hollweg, C. H., Manchin, M., Oberdabernig, D. A., Rojas-Romagosa, H., Rubinova, S. & Tomberger, P. (2016), ‘The labor content of exports database’, World Bank Policy Research Working Paper 7615.

Calì, M., Hollweg, C. et al. (2015), The labor content of exports in South Africa and Botswana, Technical report, The World Bank.

Cattaneo, O., Gereffi, G., Miroudot, S. & Taglioni, D. (2013), ‘Joining, upgrading and being competitive in global value chains: a strategic framework’, Policy Research Working Paper pp. 1–50.

Cattaneo, O. & Miroudot, S. (2013), ‘From global value chains to global development chains: An analysis of recent changes in trade patterns and development paradigms’, 21st Century Trade Policy: Back to the Past . Christ, N. & Ferrantino, M. J. (2011), ‘Land Transport for Export: The Effects of Cost, Time, and Uncertainty in Sub-Saharan Africa’, World Development 39(10), 1749–1759.

Dunbar, M. et al. (2013), ‘Engaging the private sector in skills development’, Health & Education Advice and Resource Team. Oxford Policy Management, Oxford, England.

Ernst, D. & Kim, L. (2002), ‘Global production networks, knowledge diffusion, and local capability formation’, Research policy 31(8), 1417–1429.

Feenstra, R. C. & Hamilton, G. G. (2006), Emergent economies, divergent paths: Economic organization and international trade in South Korea and Taiwan, Vol. 29, Cambridge University Press.

Feenstra, R. C., Hong, C., Ma, H. & Spencer, B. J. (2013), ‘Contractual versus non-contractual trade: The role of institutions in China’, Journal of Economic Behavior and Organization 94, 281–294.

Gereffi, G. (1999), ‘International trade and industrial upgrading in the apparel commodity chain’, Journal of international economics 48(1), 37–70.

Gereffi, G. & Fernandez-Stark, K. (2011), ‘Global value chain analysis: a primer. center on globalization’, Governance & Competitiveness.

Gereffi, G. & Frederick, S. (2010), ‘The global apparel value chain, trade and the crisis: challenges and opportunities for developing countries’, World Bank Policy Research Working Paper Series (5281).

Gereffi, G., Humphrey, J., Kaplinsky, R. & Sturgeon*, T. J. (2001), ‘Introduction: Globalisation, Value Chains and Development’, IDS Bulletin 32(3), 1–8.

Gereffi, G., Humphrey, J. & Sturgeon, T. (2005), ‘The governance of global value chains’, Review of International Political Economy 12(1), 78–104.

Gereffi, G. & Sturgeon, T. (2013), ‘Global value chain-oriented industrial policy: the role of emerging economies’, Global value chains in a changing world p. 329.

Gibbon, P. & Ponte, S. (2005), Trading down: Africa, value chains, and the global economy, Temple University Press.

González, J. L. & Holmes, P. (2011), ‘The nature and evolution of vertical specialisation: What is the role of preferential trade agreements?’, NCCR Trade Working Paper 2011/41.

Grossman, G. M. & Rossi-Hansberg, E. (2012), ‘Task trade between similar countries’, Econometrica 80(2), 593–629.

Henderson, J., Dicken, P., Hess, M., Coe, N. & Yeung, H. W.-C. (2002), ‘Global production networks and the analysis of economic development’, Review of International Political Economy 9(3), 436–464.

Hoekman, B. (2014), ‘Supply chains, mega-regionals and multilateralism: a road map for the wto’, Robert Schuman Centre for Advanced Studies Research Paper No. RSCAS 27.

Hummels, D., Minor, P., Reisman, M. & Endean, E. (2007), ‘Calculating tariff equivalents for time in trade’, USAID Report, March.

Humphrey, J. (2004), ‘Upgrading in global value chains’.

Humphrey, J. & Schmitz, H. (2002), ‘How does insertion in global value chains affect upgrading in industrial clusters?’, Regional studies 36(9), 1017–1027.

Kaplinsky, R. & Morris, M. (2001), A handbook for value chain research, Vol. 113, IDRC Ottawa.

Lundvall, B., Jurowetzki, R. & Lema, R. (2015), ‘Combining the global value chain and the innovation system perspectives’, Aalb. Univ. Dep. Bus. Manag.

Malerba, F. & Nelson, R. (2010), Catching up in different sectoral systems: evidence from six industries, in ‘Globelics Conference, Kuala Lumpur, Malaysia’, p. 2010.

Mazumdar, D. & Sarkar, S. (2008), Globalization, labor markets and inequality in India, Vol. 79, IDRC.

Memedović, O. & Shepherd, A. (2008), Agri-food Value Chains and Poverty Reduction: Overview of Main Issues, Trends and Experiences, United Nations Industrial Development Organization.

Milberg, W. (2004), ‘The changing structure of trade linked to global production systems: What are the policy implications?’, International Labour Review 143 (1-2),(1), 45–90.

Milberg, W. & Winkler, D. (2013), Outsourcing economics: global value chains in capitalist development, Cambridge University Press.

Pal, P., Ghosh, J. et al. (2007), ‘Inequality in India: A survey of recent trends’, Economic and Social Affairs Working Paper 45.

Pietrobelli, C. & Rabellotti, R. (2006), ‘Clusters and value chains in Latin America: In search of an integrated approach’, Upgrading to compete: global value chains, clusters, and SMEs in Latin America pp. 1–40.

Pietrobelli, C. & Rabellotti, R. (2011), ‘Global value chains meet innovation systems: are there learning opportunities for developing countries?’, World Development 39(7), 1261–1269.

Pisano, G. P. & Shih, W. C. (2009), ‘Restoring American competitiveness’.

Ponte, S. (2008), ‘Developing a vertical dimension to chronic poverty research: Some lessons from global value chain analysis’, Chronic Poverty Research Centre Working paper.

Ponte, S. & Gibbon, P. (2005), ‘Quality standards, conventions and the governance of global value chains’, Economy and Society 34(1), 1–31.

Porter, M. E. (1985), Competitive Advantage: Creating and sustaining superior performance, The Free Press.

Posthuma, A. & Nathan, D. (2010), Labour in Global Production Networks in India, Oxford University Press.

Rodrik, D. (2000), ‘How Far Will International Economic Integration Go?’, Journal of Economic Perspectives 14(1), 177–186.

Schmitz, H. (2004), Local upgrading in global value chains: recent findings, in ‘International Convention Centre. Durban, South Africa’, Vol. 21, pp. 1–8.

Schmitz, H. (2006), ‘Learning and earning in global garment and footwear chains’, The European Journal of development research 18(4), 546–571.

Sturgeon, T. J. (2001), How Do We Define Value Chains and Production Networks?, Technical Report 3, IDS Bulletin.

Szapiro, M. (2016), Global Value Chains and National Systems of Innovation: policy implications for developing countries, PhD thesis, Universidade Federal do Rio de Janeiro.

Taglioni, D. & Winkler, D. (2016), Making Global Value Chains Work for Development, Vol. Trade and Development series, Washington, DC: World Bank.

UNCTAD (2013), ‘Global value chains and development’, World Investment Report 2013.

WEF (2013), Enabling Trade: Valuing growth opportunities, in ‘World Economic Forum’