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Begin New Search Topic Global Value Chains Publication Year within 10 Years

61. Implications of Foreign Direct Investment, Capital Formation and its Structure for Global Value Chains

Author:
Amat Adarov and Robert Stehrer
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
In the age of globalisation, international trade and foreign direct investment (FDI) have become integral elements of cross-country production sharing. In this paper we empirically assess the impact of FDI, as well as capital dynamics and structure, on the formation of global value chains (GVC) and trade in value added at country and sectoral levels based on a database constructed for a sample of European countries over the period 2000-2014. The analysis reveals that inward FDI is especially conducive to the formation of backward linkages while outward FDI facilitates forward GVC participation, especially in high-tech manufacturing sectors. A particularly robust influence of FDI and capital accumulation on GVC integration is identified in the textile and clothing industry. While capital accumulation in general intensifies GVC linkages for most sectors, ICT capital appears to be especially instrumental for backward integration of electrical and transportation equipment sectors.
Topic:
Globalization, International Trade and Finance, Foreign Direct Investment, Trade, and Global Value Chains
Political Geography:
United States, Japan, and Europe

62. Testing the Smile Curve: Functional Specialisation in GVCs and Value Creation

Author:
Roman Stöllinger
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
According to the ‘smile curve hypothesis’ the potential for generating value added varies significantly across the various functions along a firm’s value chain. It suggests in particular that the production stage is the least promising value chain function in the entire manufacturing process. This logic implies that countries specialising as ‘factory economies’ are likely to generate comparatively little value added. To shed light on the relationship between functional specialisation along the value chain and value creation, this paper develops measures for functional specialisation derived from project-level data on greenfield FDI for a global sample of countries. These measures keep the industry and the functional dimension of specialisation strictly apart. They are used to test econometrically the negative relationship between value added creation and functional specialisation in production as predicted by the smile curve hypothesis.
Topic:
International Trade and Finance, European Union, Economy, NAFTA, Manufacturing, and Global Value Chains
Political Geography:
Europe and East Asia

63. Competing with Whom? European Tax Competition, the “Great Fragmentation of the Firm,” and Varieties of FDI Attraction Profiles

Author:
Javier Garcia-Bernardo and Arjan Reurink
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
International tax competition is generally framed as states competing for foreign direct investment (FDI), and analyses of the phenomenon draw heavily on FDI statistics. In and of themselves, however, FDI statistics are merely a quantification of the value of investment projects and tell us little about the heterogeneity of these projects and the distinct patterns of competitive dynamics between countries they generate. In this paper, we create a more sophisticated understanding of international tax competition by pointing out its variegated nature. To do so, we introduce the notion of the “great fragmentation of the firm” to distinguish between five categories of FDI: manufacturing affiliates, shared service centers, research and development facilities, intermediate holding companies, and top holding companies. Using a novel combination of firm-level and country-level data, we identify for each category of FDI which European Union member states are most successful in attracting it, what macro-institutional and tax arrangements they rely on for doing so, and what benefits they receive from it in terms of tax revenues and employment creation. In this way we were able to identify five distinct FDI attraction profiles and show that, rather than being a game of all against all, tax competition in the European Union increasingly takes place amongst subsets of countries that compete for similar categories of FDI.
Topic:
Foreign Direct Investment, European Union, Global Value Chains, Wealth, Tax Competition, and Transnational Corporations
Political Geography:
Europe

64. Se nos va el cuidado, se nos va la vida: Migración, destierro, desplazamiento y cuidado en Colombia

Author:
Camila Esguerra Muelle, Ivette Sepúlveda Sanabria, and Friederike Fleischer
Publication Date:
06-2018
Content Type:
Policy Brief
Institution:
Centro Interdisciplinario de Estudios sobre Desarrollo (CIDER), Universidad de los Andes
Abstract:
El presente documento desarrolla una serie de reflexiones derivadas del proyecto de investigación “Migración y Cadenas Globales de Cuidado”, el cual ha arrojado como hallazgos y problematizaciones sobre las condiciones y consecuencias de la migración —interna e internacional— el destierro y el desplazamiento de mujeres colombianas trabajadoras del cuidado y sus consecuencias en la economía del cuidado. El documento propone que es necesario pensar políticas públicas más integradas o intersectoriales, así como complejizar la concepción de sujetos de política pública a partir de dos planteamientos. Primero, las políticas públicas sectorizadas o sectoriales difícilmente dan cuenta de campos fenoménicos entrecruzados, en este caso la migración y el cuidado, pues hacen un recorte, una compertamentalización que hace imposible integrar el análisis y la acción sobre estos fenómenos. Segundo, la permanencia de un sujeto abstracto, homogéneo del que no se reconoce su lugar en sistemas como la clase, la raza, el género, la sexualidad, el capacitismo y la edad como sistemas de poder, o su estar simultáneo en distintos roles (como migrantes, como trabajadoras, como sujetos de salud, etc.), hace que las políticas difícilmente puedan aspirar a tener los impactos deseados en cuanto a la superación de desigualdades simbólicas y materiales en el país.
Topic:
Migration, Immigration, Citizenship, Global Value Chains, Emigration, Exile, and Care
Political Geography:
Colombia

65. Exchange Rates and Firm Exports: The Role of Foreign Ownership and Subsidiaries

Author:
Hyelin Choi and Hyo Sang Kim
Publication Date:
08-2018
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Exchange rates have been changed unusually large these days. From 2011 to 2016, the Euro and the Japanese Yen have depreciated against the US Dollar by more than 25 percent. According to a theory, since competitively valued exchange rate helps to boost export growth, we should have observed a sub-stantial increase in export in the EU and Japan. However, the effectiveness of the exchange rates on exports appears to be weak across countries. This anomaly is one of the central puzzles in international macroeconomics: why large movements in the exchange rate have modest effects on the aggregate variables such as import prices, consumer prices, and quantity of exports. In this paper, we examines the role of global production linkages on ex-change rate elasticities by using Korean firm-level data. At firm-level, foreign-owned firms or firms with foreign subsidiaries participated in the Global Value Chains (GVC) play an important role in weakening the effect of ex-change rate movements on firm exports. The empirical results show that the exchange rate elasticity of total export is about -0.64, which implies that 10% appreciation of Korean Won would make a drop in total export by 6.4%. However, the exchange rate elasticities of firms are not the homogeneous across firms. We find that the exchange rate elasticities of firm exports are significant and negative for domestic-owned firms and firms without foreign subsidiary whereas those are insignificant for foreign-owned firms and firms with foreign subsidiaries. After controlling exports to foreign affiliates, we still find that the estimated exchange rate elasticities of exports are statistically insignificant, but become negative and relatively larger for firms with global production linkages. More-over, firms with higher GVC integration measure or more imported inter-mediate inputs have the significantly lower exchange rate elasticities of firm exports. It suggests that developments of global production linkages via firm ownership, within-industry or within-firm in the last decade play an essential role in alleviating the effect of exchange rate movements on the firm exports.
Topic:
Exchange Rate Policy, Economic Policy, Exports, Macroeconomics, and Global Value Chains
Political Geography:
Global Focus

66. Driven up the wall? Role of environmental regulation in innovation along the automotive global value chain

Author:
Suchita Srinivasan
Publication Date:
06-2017
Content Type:
Working Paper
Institution:
Centre for International Environmental Studies, The Graduate Institute (IHEID)
Abstract:
Are environmental regulations imposed on downstream firms effective in spurring innovation in clean technologies by upstream firms? We use a novel firm-level dataset of global scope to study whether environmental regulations have percolated up the automotive global value chain, and led to innovation (measured by patenting in abatement technologies) by suppliers at different levels of the chain. Using a Poisson estimation methodology, we find that suppliers worldwide have responded to increasingly stringent emission standards imposed on automobile manufacturers (also known as original equipment manufacturers, or OEMs) by undertaking more innovation in clean abatement technologies; additionally, we find that the smaller the gap between the average environmental regulation suppliers face from the OEMs, and that in the country where the firm is located, the more the firm innovates. In addition, we provide evidence of a spread of these positive effects of regulation on innovation, with suppliers at different upstream levels responding positively to the downstream standards. This paper has important policy implications for the design of environmental policy instruments to induce innovation in clean technologies by firms along the value chain.
Topic:
Environment, Regulation, Global Value Chains, Patents, and Automotive Industry
Political Geography:
Global Focus