Global Value Chains and Union Decline in Rich Democracies

Global supply (or ‘value’) chains add much to the value of global markets, offering benefits to both producers and consumers. Yet, global supply chains also carry a potential for harm that is often beyond the reach of current legal remedies. They can shield those that produce faulty or hazardous products or artificially raise prices from legal responsibility for the harms they cause to markets, consumers, or the environment. This article focuses on one set of those potential harms—those caused by anti-competitive conduct, but many of the issues also arise in relation to environmental, financial, and other types of harm. Producers anywhere in a chain can impede competition and raise prices for all subsequent purchasers. Such conduct may have effects in many jurisdictions, and its harmful effects are likely to be incurred outside the jurisdiction in which the conduct is located. Few legal tools are available for deterring such harms, and until very recently legal analysts have tended to subsume the issues under existing categories, often failing to notice that these categories and the tools based on them may be inadequate and ineffective in responding to a new organizational form. The inadequacy of the current legal framework calls for efforts to develop more effective tools, both domestic and transnational. This article reviews current responses to the problem and identifies the potential value of transnational coordination as a response.

LDCs' trade patterns changed in the past decade, thanks to the rebalancing of global demand towards large emerging countries and the resulting cycle of high international commodity prices. This process led to a wider geographical diversification of LDCs' exports but contributed also to a greater reliance on those highly priced commodities. Notwithstanding some progress in market and product diversification — including services — LDCs remain particularly vulnerable to external shocks. With the exception of 2006-2008, the LDCs as a group have systematically recorded a trade deficit. The 2008-2009 global crisis and the bumpy recovery which followed illustrate the volatility of the recent trends. In such a perspective, renewed efforts towards extensive product diversification are called for. Fostering diversification has been supported for many years by preferential market access to developed countries; more recently, emerging countries have also been granting such preferences to LDCs products. Preferential market access remains relevant, but is not sufficient to improve the supply-side capabilities. The new business model related to global value chains (GVC) offers new opportunities to LDCs for export diversification. But GVC participation cannot materialize without a proper trade environment. Some of the main obstacles for joining GVCs are the high transaction costs in importing the necessary inputs and exporting the processed goods. Active trade facilitation programmes, such as those identified during the Fourth Global Review of Aid for Trade in July 2013 offer new options to LDCs for joining GVCs. For those LDCs that have already been able to join these global production network, up-grading towards higher "value-added" activities requires more encompassing horizontal policies.

This chapter explores efforts to improve labour conditions and wages along global value chains in three key sectors: apparel and textiles; agriculture and agro-processing; and tourism. Asymmetrical power relations exist across these chains that are skewed in favour of lead firms (multi-national corporations). The priorities and demands of lead firms are thus pushed down the chain to less powerful actors, often shaping working conditions and wages at the bottom of the chain. All too often, these demands have been rooted in reducing costs and increasing profits. Accordingly, this chapter focuses on the strategies that govern working conditions of labour in global value chains, and the related impact(s) (e.g. in terms of the number and quality of employment opportunities). Governance of labour in a value chain context has predominantly been implemented through compliance-based strategies, in which firms within GVCs have to comply with standards dictated by the lead firm if they want to participate in a value chain. However, other actors have to some extent been able to influence these standards; this includes closer partnerships (and support) with supplier firms (mentor-driven strategies) often based in low-income countries; broader coalitions of actors especially from civil society (associative strategies e.g. Fairtrade, government regulations); or pressure from workers themselves (bottom-up strategies). While desired changes for labour when participating in a value chain include social upgrading (higher wages and better working conditions), the chapter illustrates in the governance of labour there are rarely ‘win-win’ strategies that promote all desired improvements. Change is often partial and accompanied by social downgrading (i.e. negative changes).

PurposeThis paper aims to examine the relationship between economic upgrading (implementing higher value-added activities) and social upgrading (improvements in workers’ rights and employment) of supplier firms in global value chains (GVCs) governed by multinational enterprises (MNEs). This paper answers Buckley and Ghauri’s (2004) and Buckley and Strange (2015) calls to incorporate other theoretical approaches within the international business (IB) literature. Furthermore, the paper also responds to Lee and Gereffi (2015) argument, published in Critical perspectives on international business, of the need to incorporate the social impact of upgrading in the IB literature.Design/methodology/approachSemi-structured interviews were undertaken with representatives from five supplier firms each in Bangladesh and Sri Lanka, as well as with industry representatives.FindingsGovernance patterns within GVCs can create the conditions for economic upgrading leading to social upgrading achievements. Institutional factors also affect the conditions for social upgrading. Although moving to higher value-added activities is critical for supplier firms, this does not necessarily lead to social upgrading. This paper’s research findings suggest that the combination of economic and social upgrading is positively associated with suppliers manufacturing high value-added products and operating in relational networks. In contrast, economic upgrading, by itself, was limited to those firms manufacturing low value-added products, typically those in captive networks.Originality valueThis research is among an emerging body of literature seeking to integrate the GVC literature with the IB field. Importantly, it also contributes to the GVC literature by providing insight into an under-theorized aspect – the relationship between social and economic upgrading.

Purpose – By examining SMEs’ participation in trade fairs as a way to establish network relationships within a global value chain (GVC), the purpose of this paper is to offer one example of the steps used to reach this goal. Design/methodology/approach – The study uses a priori deductions derived from prior literature and case analysis of a purposive sample of six New Zealand SMEs to develop propositions on the use of trade fairs to enter a GVC network. The authors use the typology of GVC governance developed by Gereffi et al. (2005) to investigate how the use of trade fairs varies for each governance type. Findings – The study concludes that international trade fairs offer great network-building possibilities for SMEs, as well as selling, promotion and information gathering benefits. Both theoretical argument and experiential evidence suggest that these benefits are contingent on the GVC’s governance type. Originality/value – Although there is extensive work on the importance of networks to SME internationalisation, less has been done on the detailed steps used to build these networks.

This research examines how institutional factors (public, private and social governance) Influence social upgrading in supplier firms in global value chains (GVCs) in the soccer ball industry of Pakistan. Using primary multi-source data, we found that institutional factors in GVCs play a critical role in the social upgrading of the industry. Furthermore, we revealed that social upgrading is an outcome of an interplay between public, private and social governance in GVCs.

The proliferation of global value chains is portrayed in academic and policy circles as representing new development opportunities for firms and regions in the global south. This article tests these claims by examining original material from non-governmental organizations’ reports and secondary sources on the garment and electronics chains in Cambodia and China, respectively. This empirical evidence suggests that these global value chains generate new forms of worker poverty. Based on these findings, the article proposes the novel Global Poverty Chain approach. The article critiques and reformulates principal concepts associated with the Global Value Chain approach – of value-added, rent and chain governance – and challenges a core assumption prevalent within Global Value Chain analysis: that workers’ low wages are a function of their employment in low productivity industries. Instead, it shows that (1) many supplier firms in the global south are as, or more, productive than their equivalents in the global north; (2) often predominantly female workers in these industries are super exploited (paid wages below their subsistence requirements) and (3) chain governance represents a lead firm value-capturing strategy, which intensifies worker exploitation.

The Marrakesh Agreement establishing the WTO recognized the need for positive steps to be taken to ensure that developing countries, and especially the least developed among them, secure a share in the growth of international trade that is commensurate with their economic development needs. This article discusses how the WTO helps to facilitate Africa’s integration into the WTO multilateral trading system. It is argued that while African countries are actively engaged in the work of the WTO and are pursuing their economic and policy interests, some key challenges remain. These include further diversifying their production, linking to global value chains (GVCs) and developing adequate infrastructure to facilitate digital trade so that it becomes a vehicle for economic growth. The WTO, working closely with partner institutions, supports Africa in its endeavours to tackle some of these challenges, offering a range of programmes that are geared towards trade capacity-building. It is argued that the work undertaken by WTO Chairs and academic institutions under the aegis of the WTO’s Chairs Programme (WCP) is of critical importance in providing the analytical underpinnings for the policy choices that will encourage fuller integration into the multilateral trading system. This programme was significantly expanded and deepened in 2021 with a view to strengthening its capacity to provide support to beneficiaries and especially least-developed countries (LDCs) (largely African countries) so that they can more fully embrace the multilateral trading system. trade, capacity-building, Africa, WTO, global value chains, academic support

Value chains and the great recession: Evidence from Italian and German firms

This report focuses on special economic zones (SEZs) which are widely used across most developing and many developed economies. It explores the place of SEZs in today’s global investment landscape and provides guidance for policymakers on how to make SEZs work for sustainable development. It presents international investment trends and prospects at global, regional and national levels, as well as the evolution of international production and global value chains. It analyses the latest developments in new policy measures for investment promotion, facilitation and regulation around the world.

Recently, with the increasing trend of anti-globalization, China's manufacturing industry has encountered instability in the supply of upstream products in international trade, a challenge that has given rise to an urgent demand for ways to improve China's position in the global production chain. In response to this challenge, the 14th Five-Year Plan puts forward the strategic goal of building multi-level, multi-node, networked city clusters and trade powerhouses, which provides new development opportunities for China to strengthen its position in the global production chain through the model of polycentric agglomeration. In order to gain a deeper understanding of the impact of polycentric agglomeration on the position of enterprises in the global production chain, this project will use the instrumental variable estimation method to conduct an empirical study. This method can help us accurately identify the causal relationship between polycentric agglomeration and global production chain position and assess the differential impact of different agglomeration patterns on firms' production chain position. Through this study, we expect to reveal how polycentric agglomeration can enhance firms' global production chain positions through mechanisms such as optimizing resource allocation, promoting technological innovation, and strengthening industrial chain synergies. In addition, we plan to explore the impact of polycentric agglomeration on the evolution of firms' roles in global value chains and on international trade competitiveness. The objective of this study is to provide targeted recommendations for policymakers and enterprises to help them achieve high-quality development of China's manufacturing industry by optimizing the structure of polycentric agglomeration in the context of global production chain restructuring. Through this comprehensive study, we expect to provide scientific decision support and action guidelines for China's sustainable upgrading and competitiveness enhancement in global production chains.

We study the relationship between the extent of participation in global agricultural value chains (GAVCs) and food prices at the country level. Using longitudinal data on a sample of 138 countries for the period 2000–2015 and a shift‐share instrumental variable design, we study how the extent of a country's participation in GAVCs in a given year relates to food price levels and volatility in that same country and in the same year. We document a mean–variance trade‐off, finding that on average, participation in GAVCs is associated with a decrease in consumer food price levels but an increase in food price volatility. Looking at a country's upstream (i.e., closer to producers) or downstream (i.e., closer to consumers) positioning in GAVCs, we find that food price volatility is associated more strongly with downstream participation than with upstream participation.

Prelims -- Case examples -- Organizational forms -- Consequences of fragmenting -- About the authors -- Index

Scholars of inequality generally find that lower-class individuals are more skeptical of meritocratic narratives that link economic success to individual work effort. However, past research has yielded inconclusive findings about how economic inequality affects meritocratic attitudes across different class groups. Theories of activated class conflict suggest that class matters more in high-inequality contexts, while theories of relative power suggest that these class-based differences are smaller in more unequal contexts. We argue that past studies have been unable to effectively adjudicate between these theories because they conflate the between- and within-country relationships between inequality and meritocratic attitudes, assume that the impacts of rising and falling inequality are symmetrical, and tend to focus on rich democracies thus limiting important cross-national and temporal variation in income inequality. Using multiple waves of the World Values Survey and multilevel regression models, we build on this prior research empirically by (1) disentangling the cross-country and asymmetrical temporal components of the inequality-meritocracy relationship, and (2) employing a broader sample of developing and rich countries to leverage more variation in country-level income inequality. We find that class-based cleavages in meritocratic attitudes are smaller in countries with higher average levels of inequality. Further, while declining inequality is associated with increased meritocratic beliefs across class lines, we find no evidence that rising inequality suppresses these beliefs. Our results demonstrate how contrasting theoretical frameworks can explain different components of the inequality-meritocracy relationship (i.e., cross-sectional and asymmetrical temporal components). We conclude by discussing the challenges our findings pose for partisans of egalitarian politics.

This thesis considers the challenges of late development in the age of neoliberalism and the impact of global economic and political forces on catch-up efforts in Ethiopia and Vietnam. It identifies two dominant interpretations of this relationship, which map onto the divide between the mainstream and heterodox development literatures. It suggests that for all their differences, both approaches adopt too deterministic a reading of the relationship between national development and global conditions, and in-so-doing misdiagnose obstacles to late development. Instead the thesis advances that the impacts of global conditions on late development prospects are the context-specific outcome of interactions between a nation’s development strategy and shifts in global capitalism. This suggests that historically informed political economy analysis is needed to examine prospects for the emergence of forms of developmentalism in the current age. To explore such possibilities, the thesis examines the development trajectories of Ethiopia and Vietnam, two rapidly growing developing economies with state-led and manufacturing oriented development strategies. These two late developers have sought to power structural transformation by combining state ownership over the commanding heights of the economy with a strong emphasis on public investment, followed by the embrace of foreign capital to facilitate participation in global value chains. This represents an attempt to selectively appropriate elements of the global order to serve the domestic political and economic ends of their respective ruling parties. Their experiences provide a forceful reminder that forms of developmentalism endure under neoliberalism and expose the variegated nature of late development constraints (and opportunities).