Hostname: page-component-78c5997874-4rdpn Total loading time: 0 Render date: 2024-11-10T09:46:25.497Z Has data issue: false hasContentIssue false
  • English
  • Français

ON THE RELEVANCE OF GLOBAL VALUE CHAINS AND THE INTRA-EUROPEAN DIVISION OF LABOUR

Published online by Cambridge University Press:  28 April 2020

Manuel Fritsch  and
Jürgen Matthes
Manuel Fritsch
Affiliation:
IW, Cologne. E-mails: fritsch@iwkoeln.de; matthes@iwkoeln.de.
Jürgen Matthes
Affiliation:
IW, Cologne. E-mails: fritsch@iwkoeln.de; matthes@iwkoeln.de.
Get access Rights & Permissions [Opens in a new window]

Abstract

This article first introduces the concept, the rationale, the causes and the genesis of global value chains from a worldwide perspective in the form of a brief overview. In the second empirical section, a closer look is taken at the intermediate trade integration in the EU. In particular, the employment effects of the intermediate trade connections for each EU member state and for selected sectors are highlighted. In the concluding section, it is explained why global value chains are particularly susceptible to rising protectionism. Moreover, tentative implications of the current coronavirus pandemic are pointed out.

Keywords

Global value chainstrade in intermediatessingle marketemployment effects of GVCs.F14F15N14.
Type
Research Article
Information
National Institute Economic Review , Volume 252 , May 2020 , pp. R4 - R18
Copyright
© National Institute of Economic and Social Research, 2020

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

This article is based on a study by Fritsch and Matthes (2017) which was commissioned by the Bertelsmann Foundation. It has been revised, thoroughly updated and shortened.

References

REFERENCES

Amador, J. and Cabral, S. (2014), Global value chains, surveying drivers and measures’, CompNet Working Paper Series, No. 1739, Frankfurt am Main.Google Scholar
Amador, J. and Cabral, S. (2017), ‘Networks of value-added trade’, in The World Economy, 40, 7, pp. 1291–313.CrossRefGoogle Scholar
Amador, J. and Di Mauro, F. (eds) (2015), The Age of Global Value Chains: Maps and Policy Issue, VoXEU.org ebook, http://voxeu.org/system/files/epublication/GVCs-ebook_0.pdf [2019-12-09].Google Scholar
Bair, J. (2005), ‘Global capitalism and commodity chains: looking back, going forward’, Competition and Change, 9, 2, pp. 153–80.CrossRefGoogle Scholar
Baldwin, R. (2010), ‘Unilateral tariff liberalisation’, The International Economy, 14, pp. 10–43.Google Scholar
Baldwin, R. (2011), ‘21st century regionalism: filling the gap between 21st century trade and 20th century trade rules’, Geneva, Graduate Institute Staff Working Paper, No. ERSD-2011-08.Google Scholar
Baldwin, R. (2012a), ‘Global supply chains: why they emerged, why they matter, and where they are going’, Geneva, Centre for Trade and Economic Integration Working, Papers, No. 2012-13.Google Scholar
Baldwin, R. (2012b), ‘WTO 2.0: global governance of supply-chain trade’, London, CEPR Policy Insight, 64.Google Scholar
Baldwin, R. (2016), The Great Convergence, Information Technology and the New Globalization, Cambridge, M.A.Google Scholar
Baldwin, R. and Lopez-Gonzalez, J. (2015), ‘Supply-chain trade: a portrait of global patterns and several testable hypotheses’, The World Economy, 38, 11, pp. 1682–721.CrossRefGoogle Scholar
Bontadini, F., Evangelista, R., Meliciani, V. and Savona, M. (2019), ‘Integration in global value chains and employment in Europe’, University of Sussex Business School, SPRU Working Paper Series, No. 2019-16.Google Scholar
Chad, B. (2018), ‘Protectionism was threatening global supply chains before Trump’, VoxEU.org, https://voxeu.org/article/protectionism-was-threatening-global-supply-chains-trump [2020-02-09].Google Scholar
CLEPA – European Association of Automotive Suppliers (2017), ‘Brexit should not undermine automotive competitiveness, manufacturers and suppliers warn’, http://clepa.eu/mediaroom/brexit-not-undermineautomotive-competitiveness-manufacturers-supplierswarn/ [2017-07-03].Google Scholar
De Backer, K. and Miroudot, S. (2014), ‘Mapping global value chains’, Frankfurt am Main, ECB Working Paper Series, No. 1677.Google Scholar
Degain, C., Meng, B. and Wang, Z. (2017), ‘Recent trends in global trade and global value chains’, in World Bank, Measuring and Analyzing the Impact of GVCs on Economic Development – Global Value Chain Development Report 2017, pp. 37–68, https://www.wto.org/english/res_e/booksp_e/gvcs_report_2017_chapter2.pdf [2020-02-10].Google Scholar
European Central Bank (ECB) (2019a), Economic Bulletin, 6, Frankfurt am Main.Google Scholar
European Central Bank (ECB) (2019b), ‘The impact of global value chains on the euro area economy’, ECB Occasional Paper Series, 221, April, https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op221~38185e6936.en.pdf [2020-02-10].Google Scholar
Eurostat (2020), ‘National accounts employment data by industry (nama_10_a64_e)’, Datenstand 16.1.2020, http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=nama_10_a64_e&lang=en [2020-02-10].Google Scholar
Evenett, S. and Fritz, J. (2019), Going It Alone? Trade Policy After Three Years of Populism, The 25th Global Trade Alert Report, https://www.globaltradealert.org/reports/download/48 [2020-02-10].Google Scholar
Fort, T.C. (2016), ‘Technology and production fragmentation: domestic versus foreign sourcing’, NBER Working Paper, No. 22550, Cambridge, M.A.CrossRefGoogle Scholar
Foster, N., Stehrer, R. and Timmer, M. (2013), ‘International fragmentation of production, trade and growth: impacts and prospects for EU member states’, European Economy Economic Papers, No. 484, Brussels.Google Scholar
Francois, J., Baughman, L.M. and Anthony, D. (2018), ‘Trade discussion’ or ‘trade war’?, The estimated impacts of tariffs on steel and aluminum’, Policy Brief, June, https://tradepartnership.com/wp-content/uploads/2018/06/232RetaliationPolicyBriefJune5.pdf [2020-02-10]Google Scholar
Fritsch, M. (2020), ‚Viele Jobs hängen am Export‘, in iwd, 04.02.2020, https://www.iwd.de/artikel/viele-jobs-haengen-am-export-459120/ [2020-02-10].Google Scholar
Fritsch, M. and Matthes, J. (2017), ‘Factory Europe and its ties in global value chains’, GED Focus Paper, commissioned by Bertelsmann Stiftung, Cologne.Google Scholar
Gaulier, G., Sztulman, A. and Ünal, D. (2019), ‘Are global value chains receding? The jury is still out. Key findings from the analysis of deflated world trade in parts and components’, CEPII Working Paper, No 2019-01, http://www.cepii.fr/PDF_PUB/wp/2019/wp2019-01.pdf [2020-02-10].CrossRefGoogle Scholar
Gereffi, G. (1994), ‘The organization of buyer driven global commodity chains: how US retailers shape overseas production networks’, in Gereffi, G. and Korzeniewicz, M. (eds), Commodity Chains and Global Capitalism, London, pp. 95-122.Google Scholar
Gereffi, G. and Lee, J. (2012), ‘Why the world suddenly cares about global supply chains’, Journal of Supply, Chain Management, 48, 3, pp. 24–32.CrossRefGoogle Scholar
Handley, K., Kamal, F. and Monarch, R. (2020), ‘Rising import tariffs, falling export growth: when modern supply chains meet old-style protectionism’, NBER Working Paper, No. 26611, Cambridge, M.A.CrossRefGoogle Scholar
Helpman, E. (1984), ‘A simple theory of trade with multinational corporation’, Journal of Political Economy, 92, 3. pp. 451–71.CrossRefGoogle Scholar
Hufbauer, G.C. and Jung, E. (2018), ‘Steel profits gain, but steel users pay, under Trump’s protectionism, trade and investment policy watch’, Peterson Institute for International Economics, https://www.piie.com/blogs/trade-investment-policy-watch/steel-profits-gain-steel-users-pay-under-trumps-protectionism [2020-02-10].Google Scholar
Huidrom, R.et al. (2019), ‘Trade tensions, global value chains, and spillovers, insights for Europe’, IMF European Department, No. 19/10, https://www.imf.org/~/media/Files/Publications/DP/2019/English/TTGVCSIEEA.ashx [2020-02-10].CrossRefGoogle Scholar
Johnson, R.C. (2014), ‘Five facts about global value added exports and implications for macroeconomics and trade research’, Journal of Economic Perspectives, 28.2, pp. 119–42.CrossRefGoogle Scholar
Johnson, R.C.and Noguera, G. (2017), ‘A portrait of trade in value-added over four decades’, The Review of Economics and Statistics, 99, 5, pp. 896–911.CrossRefGoogle Scholar
Kaplan, L.C. (2018), ‘Supply-chain trade and labor market outcomes: the case of the 2004 European Union enlargement’, Review of International Economics, 26, 2, pp. 481–506.CrossRefGoogle Scholar
Kersan-Škabić, I. (2019), ‘The drivers of global value chain (GVC) participation in EU member states’, Economic Research-Ekonomska Istraživanja, 32, 1, pp. 1204–18.CrossRefGoogle Scholar
Krugman, P. and Obstfeld, M. (2004), Internationale Wirtschaft. Theorie und Politik der Außenwirtschaft [International Economics. Theory and Policy of Foreign Trade], 6th ed., Munich.Google Scholar
Krugman, P.R. and Venables, A.J. (1995), ‘Globalization and the inequality of nations’, The Quarterly Journal of Economics, 110. 4, pp. 857–80.CrossRefGoogle Scholar
Lankhuizen, M. and Thissen, M. (2019), ‘The implications of re-exports for gravity equation estimation’, Spatial Economic Analysis, 14, 4, pp. 384–403.CrossRefGoogle Scholar
Li, X., Meng, B. and Zhi Wang, Z. (2019), ‘Recent patterns of global production and GVC participation’, in WTO (ed.), Technical innovation, supply chain trade, and workers in a globalized world, Global Value Chain Development Report 2019, pp. 9–43, https://www.wto.org/english/res_e/booksp_e/gvc_dev_report_2019_e_ch1.pdf [2020-02-10].CrossRefGoogle Scholar
Los, B., Chen, W., McCann, P. and Ortega-Argilés, R. (2018), ‘An assessment of Brexit risks for 54 industries: most services industries are also exposed’, City-REDI Policy Briefing Series, December, https://blog.bham.ac.uk/cityredi/wp-content/uploads/sites/15/2018/01/CityREDI-Briefing-Template_Sectoral-Analysis.pdf.Google Scholar
Los, B., Timmer, M.P. and de Vries, G.J. (2014), ‘How global are global value chains? A new approach to measure international fragmentation’, Journal of Regional Science, 55, 1, pp. 66–92.CrossRefGoogle Scholar
Markusen, J.R. (2002), Multinational Firms and the Theory of International Trade, Cambridge, M.A. and London.CrossRefGoogle Scholar
Matthes, J. (2009), ‘Eine relativierung der exporterfolge von MOE-Staaten’ [A Relativization of Export Success in CEE Countries], IW-Trends, 36, 2, pp. 49–63.Google Scholar
Ming, Y., Meng, B. and Wei, S-J. (2015), ‘Measuring Smile Curves in global value chains’, Institute of Developing Economies Discussion Paper, No. 530, Tokyo.Google Scholar
Mudambi, R. (2007), ‘Offshoring: economic geography and the multinational firm’, Journal of International Business Studies, 38.1, 206.Google Scholar
Mudambi, R. (2008), ‘Location, control and innovation in knowledge-intensive industries’, Journal of Economic Geography, 8(2008), pp. 699–725.CrossRefGoogle Scholar
OECD (Organisation for Economic Co-operation and Development) (2013), Interconnected Economies – Benefitting from Global Value Chains, Paris, OECD.Google Scholar
OECD (Organisation for Economic Co-operation and Development) (2018), OECD Inter-Country Input-Output (ICIO) Tables, December 2018 Release, https://www.oecd.org/sti/ind/inter-country-input-output-tables.htm [2020-02-10].Google Scholar
OECD (Organisation for Economic Co-operation and Development) (2019), ‘The future of global value chains: business as usual or “A New Normal”?’, STI Policy Note, Paris.Google Scholar
OECD/WTO/World Bank (2014), Global Value Chains: Challenges, Opportunities, And Implications For Policy, report prepared for submission to the G20 Trade Ministers Meeting Sydney, Australia, July 19, https://www.oecd.org/tad/gvc_report_g20_july_2014.pdf [2017-06-09].Google Scholar
Park, A., Nayyar, G. and Low, P. (2013), Supply Chain Perspectives and Issues: A Literature Review, Geneva.CrossRefGoogle Scholar
Santoni, G. and Taglioni, D. (2015), ‘Networks and structural integration in global value chains’, in Amador, J. and di Mauro, F. (eds), The Age of Global Value Chains: Maps and Policy Issue, VoXEU.org ebook, pp. 68–84, http://voxeu.org/system/files/epublication/GVCsebook_0.pdf [2017-06-09].Google Scholar
Timmer, M.P., Los, B., Stehrer, R. and De Vries, G.J. (2013), ‘Fragmentation, incomes and jobs: an analysis of European competitiveness’, Economic Policy, 28, 76, pp. 613–661.CrossRefGoogle Scholar
Van der Marel, E. (2015), Positioning on the Global Value Chain Map: Where do you want to be, ECIPE Occasional Paper, 1, Brussels.Google Scholar
World Trade Organization (WTO) (2014), World Trade Report, Chapter C: The rise of global value chains, Geneva.Google Scholar
World Trade Organization (WTO) (2017), Regional Trade Agreements, Facts and Figures, https://www.wto.org/english/tratop_e/region_e/regfac_e.htmt [2017-06-20].CrossRefGoogle Scholar
World Trade Organization (WTO) (2019), Overview of Developments in the International Trading Environment: Annual Report by the Director-General, Mid-October 2018 to mid-October 2019, WT/TPR/OV/22, Geneva.Google Scholar
World Trade Organization (WTO) (2020), Regional Trade Agreements, https://rtais.wto.org/UI/PublicMaintainRTAHome.aspx [2020-02-07].Google Scholar