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1. State Upgrading in Global Value Chains and Production Networks: A Conceptual Note

Author:
Andries Bezuidenhout and Søren Jeppesen
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
Centre for Business and Development Studies (CBDS), Copenhagen Business School
Abstract:
Despite the contribution and influence of the Global Value Chains (GVCs) and Global Production Networks (GPNs) perspectives on our understanding of processes of economic and social development, the understanding of the role of the state within in this framework has some limitations. Based on an assessment of perspectives on the role of the state within GVCs/GPNs, we propose that there is a need to supplement these existing understandings of the state with an analysis of ‘state upgrading’. Recognizing state upgrading as a distinct process, but related to economic and social upgrading, provides an opportunity to analyze in more detail the dynamic exchange between state institutions and GVCs/GPNs. This allows for the development of an enhanced understanding of what the substantive dimensions of the role of the state within GVCs/GPNs consists of. We suggest that such dimensions should include ‘state representational upgrading’ and ‘state institutional upgrading’. We further propose to extent the analysis to what we term the ‘upgrading nexus’ – describing the dynamic interaction between the three types of upgrading in relation to the main actors in GVCs/GPNs (the private sector/industry, the civil society/labor, and the state). With such an approach, we imply an analytical understanding of how economic, social, and state upgrading in GVCs/GPNs are either mutually reinforcing, or potentially mutually undermining. Our aim is to suggest a way of analytically addressing the role of the state within GVCs/GPNs to supplement and refine existing approaches, not to propose to develop an original theory of the state.
Topic:
Economy, Business, Networks, Institutions, Global Value Chains, Production, and State Upgrading
Political Geography:
Global Focus

2. Carbon border adjustments, climate clubs, and subsidy races when climate policies vary

Author:
Kimberly Clausing and Catherine Wolfram
Publication Date:
05-2023
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
Jurisdictions adopt heterogeneous climate policies that vary in terms of both ambition and policy approach, with some jurisdictions pricing carbon and others subsidizing clean production. We distinguish two types of policy spillovers associated with diverse policy approaches to climate change. First, when countries have different levels of climate ambition, free riders will benefit at the expense of more committed countries. Second, when countries pursue different approaches, carbon-intensive producers within cost-imposing jurisdictions will be at a relative competitive disadvantage compared with producers in subsidizing jurisdictions. Carbon border adjustments and climate clubs are attempts to respond to these policy spillovers, but when countries have divergent policy approaches, one policy alone will not be able to address both types of spillovers. We also consider the policy dynamics that result from carbon border adjustments and climate clubs; both have the potential to encourage upward harmonization of climate policy, but they come with risks. Further, the pressures of international competition in the presence of divergent climate policy approaches may result in subsidy races, which come with their own potential risks and benefits.
Topic:
Climate Change, Economics, Carbon Emissions, and Production
Political Geography:
Global Focus

3. RELATIONSHIP BETWEEN INNOVATION AND FINANCIAL PERFORMANCE IN THE GLOBAL ENVIRONMENT OF EXPORTING COMPANIES

Author:
Arben Jusufi
Publication Date:
07-2023
Content Type:
Journal Article
Journal:
Journal of Liberty and International Affairs
Institution:
Institute for Research and European Studies (IRES)
Abstract:
This research aimed to measure the impact of innovations (product innovation, technological innovation, marketing innovation, and process innovations) on the financial performance of exporting enterprises. It was based on return on assets (ROA), increase in return on sales, net profit, and increases in value per employee. The research was carried out based on primary data through the quantitative method. The study's participants were 150 Kosovo exporting companies selected randomly. Based on Pearson’s correlation analysis, it was found that there is a weak positive linear relationship between organizational innovations and product innovation, and financial performance. Additionally, a moderate positive linear relationship exists between marketing innovations, process innovations, and financial performance. Referring to the multiple linear regression, it was revealed that innovations explain 46.7% of financial performance. Process and marketing innovation had the greatest impact on financial performance, while organizational innovation had a lesser impact. The findings of this research contribute to improving the financial performance of exporting companies in Kosovo, focusing on the type of innovation that most influences performance.
Topic:
Finance, Business, Exports, Innovation, Production, and Marketing
Political Geography:
Global Focus

4. Starr Forum: Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity

Author:
Daron Acemoglu and Fotini Christia
Publication Date:
10-2023
Content Type:
Video
Institution:
MIT Center for International Studies
Abstract:
A thousand years of history and contemporary evidence make one thing clear: progress depends on the choices we make about technology. New ways of organizing production and communication can either serve the narrow interests of an elite or become the foundation for widespread prosperity. Today, digital technologies and artificial intelligence threaten jobs and democracy through excessive automation, massive data collection, and intrusive surveillance. Will the next decades bring shared prosperity or a further move in the direction of two-tiered societies? Join us for this important discussion with Daron Acemoglu, the co-author of Power and Progress.
Topic:
Science and Technology, Communications, Inequality, Elites, Prosperity, and Production
Political Geography:
Global Focus

5. The Anti-Circumvention Instrument: Another Roadblock on the Investment Development Path?

Author:
Weihuan Zhou and Victor Crochet
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
Centre for Trade and Economic Integration, The Graduate Institute (IHEID)
Abstract:
Companies from emerging economies, and China in particular, have started internationalizing their production operations. In doing so, they are following the same path as that taken by American, European and East Asian corporations before them, by setting up factories in third countries to serve their export markets from closer locations and produce more efficiently. Thus, it is no longer only developed countries’ multinationals which are moving their operations to developing countries, but emerging market companies that are increasingly engaging in production abroad. This phenomenon is having beneficial effects in countries where these companies invest and might help them start their own industrialization process. Yet, it has attracted the ire of developed countries, in particular the European Union. They are now targeting these downstream production plants abroad by using the so-called anti-circumvention instrument, resulting in trade defence duties imposed on the parent companies being extended to their foreign subsidiaries. This application of the anti-circumvention instrument departs from its historic rationale and might hinder the development of countries in need of foreign investment. Therefore, affected governments should consider taking international legal action to bring developed countries to the negotiating table to put a halt to this abuse of the anti-circumvention instrument.
Topic:
Development, Industrial Policy, Investment, Trade, Internationalization, Production, Emerging Economies, and Anti-Circumvention Instrument
Political Geography:
China, Europe, Global Focus, and United States of America

6. World Economy in Winter 2023: Expansion continues with little momentum

Author:
Klaus-Jurgen Gern, Stefan Kooths, Jan Reents, Nils Sonnenberg, and Ulrich Stolzenburg
Publication Date:
12-2023
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
The global economy held up better than expected in the face of the inflation shock and the massive tightening of monetary policy in 2023, even if the economic expansion was moderate. Inflation is now falling swiftly and monetary policy is expected to start cutting interest rates in the first half of 2024. However, there are currently scant signs that global outlook will meaningfully improve in the near term. In the advanced economies, a high level of policy uncertainty is weighing on growth while fiscal policy stimuli are waning. In China, economic momentum remains subdued due to structural problems. Overall, we expect global production - measured on a purchasing power parity basis - to increase by 2.9 percent in the coming year, following 3.1 percent in 2023. For 2025, we expect global growth to pick up to 3.2 percent. We have thus revised upwards our forecast for 2023 and 2024 slightly - by 0.1 percentage points - compared to our September report. Although unemployment in the advanced economies will increase slightly going forward, it will remain historically low. Inflation will continue to fall and generally approach target levels again by 2025.
Topic:
Monetary Policy, Economy, Inflation, and Production
Political Geography:
Global Focus

7. The CEPII Trade and Production Database

Author:
Thierry Mayer, Gianluca Santoni, and Vincent Vicard
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
This paper documents the CEPII Trade and Production Database (TradeProd), which provides data on international and domestic trade flows and trade protection. The database covers 162 countries and 9 industrial sectors over the period 1966-2018. TradeProd is intended for econometric estimation of the gravity equation and also includes a yearly balanced dataset necessary for counterfactual exercises using new quantitative trade models.
Topic:
International Trade and Finance, Tariffs, Production, and Gravity Equation
Political Geography:
Global Focus

8. Prosperity and Resilience: Diverse Production and Comparative Advantage in Modern Economies

Author:
David Henig and Anna Guildea
Publication Date:
01-2022
Content Type:
Working Paper
Institution:
European Centre for International Political Economy (ECIPE)
Abstract:
A common version of trade theory suggests that countries will specialise in a limited number of products. Using the example of David Ricardo from 1817, England specialises in cloth and Portugal in producing wine – and then they trade with each other to mutual benefit. However, this is a crude version of comparative advantage that routinely leads to political concerns about trade. Today the prime concern is that Europe and other developed countries have become too dependent on China by allowing the logic of comparative advantage to work. In short, trade has made us vulnerable. The observed reality is different. Most advanced economies produce and export a broad range of goods and services. Their governments have similar aspirations to develop and support diverse manufacturing and services, including in the most traded global sectors such as pharmaceuticals, automotive, business services, and food and drink. Modern specialisation comes in countries producing various, but not all, products within global supply chains. Patterns of trade suggest such specialisation has allowed countries to both grow and become resilient to individual shocks. Knowledge and ownership of the whole supply chain is more important than producing everything.
Topic:
Globalization, Economy, Services, Resilience, WTO, and Production
Political Geography:
Europe and Global Focus

9. Economic Costs of Friend-shoring

Author:
Beata Javorcik, Lucas Kitzmueller, Helena Schweiger, and Muhammad A. Yıldırım
Publication Date:
09-2022
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Geo-political tensions and disruptions to global value chains have led policymakers to reevaluate their approach to globalisation. Many countries are considering regionalisation and friend-shoring – trading primarily with countries sharing similar values – as a way of minimising exposure to weaponisation of trade and securing access to critical inputs. If followed through, this process has the potential to reverse global economic integration of recent decades. This paper estimates the economic costs of friend-shoring using a quantitative model incorporating inter-country inter-industry linkages. The results suggest that friend-shoring may lead to real GDP losses of up to 4.6% of global GDP. Thus, although friend-shoring may provide insurance against extreme disruptions and increase the security of supply of vital inputs, it would come at a significant cost.
Topic:
Trade, Production, Regionalization, and Friend-shoring
Political Geography:
Global Focus

10. IPR Policies and Membership in Standard Setting Organizations: A Social Network Analysis

Author:
Jiaming Jiang, Xingyuan Zhang, and Rajeev K. Goel
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Whereas technical standards and Standard Setting Organizations (SSOs) are omnipresent and essential to mass production and communications, relatively little is formally known about the propensity of firms’ decisions to belong to certain SSOs. An understanding of such propensities can explain why some firms join SSOs (and others do not) and have implications for the regulation of SSOs. This paper uses a social network analysis technique to categorize/place firms in SSO communities and then empirically analyzes their propensities to belong to SSOs. We concentrate our study on standard setting organizations’ features and their intellectual property rights (IPR) policies such as licensing rules, disclosure requirements, as well as the features of the decision process of standards. Using data on more than 1060 member firms as participants in 28 SSOs, we are able to uniquely graph the membership of firms in SSOs by highlighting some important characteristics through community detection. The results provide some novel insights into why firms might choose certain SSO communities over others.
Topic:
Communications, Business, Community, and Production
Political Geography:
Global Focus