scholarly journals On the Structure of the World Economy: An Absorbing Markov Chain Approach

Entropy ◽  
2020 ◽  
Vol 22 (4) ◽  
pp. 482
Author(s):  
Olivera Kostoska ◽  
Viktor Stojkoski ◽  
Ljupco Kocarev
Keyword(s):  
World Economy ◽  
Value Added ◽  
Product Distribution ◽  
Value Chains ◽  
Production Networks ◽  
Global Production Networks ◽  
Policy Makers ◽  
The World ◽  
Absorbing Markov Chains ◽  
World Trading System

The expansion of global production networks has raised many important questions about the interdependence among countries and how future changes in the world economy are likely to affect the countries’ positioning in global value chains. We are approaching the structure and lengths of value chains from a completely different perspective than has been available so far. By assigning a random endogenous variable to a network linkage representing the number of intermediate sales/purchases before absorption (final use or value added), the discrete-time absorbing Markov chains proposed here shed new light on the world input/output networks. The variance of this variable can help assess the risk when shaping the chain length and optimize the level of production. Contrary to what might be expected simply on the basis of comparative advantage, the results reveal that both the input and output chains exhibit the same quasi-stationary product distribution. Put differently, the expected proportion of time spent in a state before absorption is invariant to changes of the network type. Finally, the several global metrics proposed here, including the probability distribution of global value added/final output, provide guidance for policy makers when estimating the resilience of world trading system and forecasting the macroeconomic developments.

scholarly journals Chemical industry and value-added trade – A comparative study on Hungary and Poland

2019 ◽  
Vol 69 (1) ◽  
pp. 81-99 ◽  
Author(s):  
Pawel Folfas ◽  
Beáta Udvari
Keyword(s):  
Economic Policy ◽  
World Economy ◽  
New Products ◽  
Value Added ◽  
Value Chains ◽  
Production Networks ◽  
Input Output ◽  
Global Production Networks ◽  
The World ◽  
Chemical Products

Nowadays, global production networks (GPN) and global value chains (GVC) play an important role in the world economy intensifying the trade and production networks and resulting in products having value-added in different countries. The analysis of how many intermediate products a country imports in order to produce a product and of how many products a country exports to another country in order to produce new products draws the attention to value-added trade. In the present study, we compare the Hungarian and Polish value-added trade of chemicals and chemical products. We use the OECD-WTO data of value-added trade, which is based on an input-output table. By calculating numerous indices, we reveal that the domestic value-added of chemicals and chemical products in the two countries was relatively low and should be increased by adequate economic policy.

The Economic Fitness of Nations in Value Added. 2000-2014

2021 ◽  
Author(s):  
Rosario Cervantes-Martinez ◽  
Jorge Villaseñor-Becerra
Keyword(s):  
World Bank ◽  
Positive Relationship ◽  
Value Added ◽  
Production Networks ◽  
Global Production Networks ◽  
Middle Income ◽  
Middle Income Countries ◽  
The World Bank ◽  
The World ◽  
Per Capita

Abstract In this paper, we explore the Economic Fitness (EF) indicator from the World Bank Database that measures nations' level of international competitiveness. At the same time, using input-output tables, we present our estimations of this new metric, replacing the revealed comparative advantages (RCA) from exports in gross value with an estimate of RCA from exports in domestic value-added (DVA). We find that between 1995 and 2015, there is a positive relationship between Economic Fitness and per capita GDP for low and middle-income countries. Besides, from 2000 to 2014, there has been a widening gap between global exports in gross value and exports in value-added; we also show that the estimations of the EF using the domestic value-added content of exports change significantly. Suggesting that, given the increasing levels of productive links at the international level, the competitiveness of nations is also conditioned by the way they participate in global production networks.

Impact of Multinational Corporations’ Firm-Based Environmental Standards on Subsidiaries and their Suppliers: Evidence from Motorola-Penang

2005 ◽  
Author(s):  
Michael T. Rock ◽  
David P. Angel
Keyword(s):  
Multinational Corporations ◽  
Low Income ◽  
Developing Economies ◽  
Value Added ◽  
Global Value Chains ◽  
Value Chains ◽  
Development Programs ◽  
Environmental Standards ◽  
Production Networks ◽  
Global Production Networks

How successful are multinational corporations (MNCs) in extending their firm-based environmental standards to their wholly owned subsidiaries and local suppliers, particularly the small and medium sized firm suppliers in developing economies who operate as part of the global production networks of MNCs? Three developments suggest this is not an idle question. To begin with, the economic influence of MNCs is simply staggering. As Dowell et al. (1999: 4) state, the intra-firm transactions of the more than 40,000 MNCs with approximately 250,000 affiliates worldwide account for about 40% of world trade; foreign direct investment is roughly five times official development assistance, and the sales of the ten largest MNCs are larger than the GNP of the 100 poorest countries. This suggests that MNCs along with their affiliates and their suppliers have the potential for exerting substantial influences on local, national, regional, and global environments. Because most of the value added and employment in industry in most developing countries, including the developing economies of East Asia, is accounted for by small and medium sized firms that lie beyond the reach of most governments’ environmental regulatory agencies and because we suspect that the most viable path to technological upgrading and environmental improvement in the low income economies lies in finding ways to increase the participation of indigenous small and medium sized enterprises (SMEs) in the global value chains of multinationals, it is important to ask whether an upgrading strategy based on linking indigenous SMEs to the global value chains of MNCs can also be used to affect the environmental performance of SMEs. While not all the SMEs in any one developing economy are ever likely to be reached through the supply chains of MNCs, there is substantial evidence that governments working in concert with MNCs in vendor development programs linking SMEs to MNCs in some places such as Taiwan Province of China, Malaysia, and Singapore have affected the technological upgrading activities of indigenous small and medium sized firms. To date, there is little rigorous evidence to suggest that these vendor development programs have affected the environmental behavior of small and medium sized firms in the East Asian newly industrializing economies.

Global Production Networks, Territoriality, and Political Authority

2018 ◽  
pp. 332-350
Author(s):  
Stephen J. Kobrin
Keyword(s):  
Local Control ◽  
Global Economy ◽  
World Economy ◽  
Structural Changes ◽  
Political Authority ◽  
Global Network ◽  
Production Networks ◽  
Global Production Networks ◽  
National Authority ◽  
The World

This chapter argues that structural changes in the global economy resulting from the increasing importance of global production networks (GPNs) raise complex questions about the limits of national authority and the ability to exert control over economic actors based on territorial sovereignty. In a networked mode of organization of the world economy, the nodes exist simultaneously as local and global geographies and each node’s value is dependent on its integration into the global network. As a result, the ability of any given state to exert control over a given node or the network as a whole is limited. That conflicts directly with increased demands by nationalists for local control and the domestication of production. The chapter concludes that unraveling production networks is not economically practical and that conflict with nationalists will continue into the future.

The Invisible Networks of Global Production: Re-Imagining the Global Value Chain in Legal Research

2020 ◽  
Vol 16 (1) ◽  
pp. 95-117
Author(s):  
Anna Beckers
Keyword(s):  
Value Chain ◽  
Value Chains ◽  
Global Value Chain ◽  
Commodity Chain ◽  
Production Network ◽  
Production Networks ◽  
Global Production Networks ◽  
Legal Research ◽  
Legal Rules ◽  
Global Production Network

AbstractReviewing the burgeoning legal scholarship on global value chains to delineate the legal image of the global value chain and then comparing this legal image with images on global production in neighbouring social sciences research, in particular the Global Commodity Chain/Global Value Chain and the Global Production Network approach, this article reveals that legal research strongly aligns with the value chain image, but takes less account of the production-centric network image. The article then outlines a research agenda for legal research that departs from a network perspective on global production. To that end, it proposes that re-imagining the law in a world of global production networks requires a focus in legal research on the legal construction of global production and its infrastructure and a stronger contextualization of governance obligations and liability rules in the light of the issue-specific legal rules that apply to said infrastructure.

Assessment of the positions of the exporting countries of agri-food products on the world market according to their role in global value chains

2021 ◽  
pp. 8-14
Author(s):  
Elena Yu. Frolova ◽  
Keyword(s):  
Raw Materials ◽  
Action Plan ◽  
Value Added ◽  
Global Value Chains ◽  
World Market ◽  
Point Of View ◽  
Value Chains ◽  
Agricultural Exports ◽  
Export Policy ◽  
The World

The place in the rankings of agricultural exporting countries in world trade is estimated in terms of the volume of imports and exports of raw materials and food. However, to assess the efficiency of agricultural exports, it is important to analyze the value added of exported goods produced in the country. The position of the exporting country in global value chains is derived from the type of agricultural production, which in turn depends on the level of development of the national economy, the availability and breadth of use of modern high technologies. The article examines the concept of the development of world agriculture from the point of view of the formation of global value chains, set out in the report of the UN World Food Organization [1] in comparison with the political decisions of such countries as India and the People’s Republic of China in the development of agricultural and food exports. The paper analyzes the risks associated with the consolidation of developing countries as suppliers of agricultural raw materials, as well as the conditions and action plan that allow the country-exporter of agricultural raw materials to move to higher levels in the global value chains on the world market. This experience should be considered to make comprehensive and effective decisions on the formation of the export policy of agricultural products and food of the Russian Federation, considering the food security of the country.

scholarly journals Sustainability in global production networks – Introducing the notion of extended supplier networks

2018 ◽  
Vol 22 (3) ◽  
pp. 255-273 ◽  
Author(s):  
Rachel Alexander
Keyword(s):  
Network Model ◽  
Multiple Scales ◽  
Analytical Framework ◽  
Global Value Chains ◽  
Value Chains ◽  
Production Networks ◽  
Global Production Networks ◽  
Manufactured Products ◽  
Sustainability Challenges ◽  
Supplier Networks

Research considering globalized production as taking place within global production networks and global value chains has potential to provide insights into the challenges of sustainable production. However, studies employing these approaches to look at manufactured products have often concentrated on connections between lead buyers and upper tier suppliers and given insufficient attention to exploring interactions across all stages of production. In this article, the concept of extended supplier networks is introduced to address this gap by explicitly looking at how all stages of production are connected. The extended supplier network model that is presented provides an analytical framework that enables multiple scales of analysis in the study of sustainability challenges.

scholarly journals Competitive Conditions in Global Value Chain Networks: An Assessment Using Entropy and Network Analysis

Entropy ◽  
2020 ◽  
Vol 22 (10) ◽  
pp. 1068 ◽  
Author(s):  
Georgios Angelidis ◽  
Evangelos Ioannidis ◽  
Georgios Makris ◽  
Ioannis Antoniou ◽  
Nikos Varsakelis
Keyword(s):  
Value Chain ◽  
Value Added ◽  
Value Chains ◽  
Global Value Chain ◽  
Degree Centrality ◽  
Sector Structure ◽  
Input Output ◽  
Weighted Degree ◽  
The World ◽  
Weighted Degree Centrality

We investigated competitive conditions in global value chains (GVCs) for a period of fifteen years (2000–2014), focusing on sector structure, countries’ dominance and diversification. For this purpose, we used data from the World Input–Output Database (WIOD) and examined GVCs as weighted directed networks, where countries are the nodes and value added flows are the edges. We compared the in-and out-weighted degree centralization of the sectoral GVC networks in order to detect the most centralized, on the import or export side, respectively (oligopsonies and oligopolies). Moreover, we examined the in- and out-weighted degree centrality and the in- and out-weight entropy in order to determine whether dominant countries are also diversified. The empirical results reveal that diversification (entropy) and dominance (degree) are not correlated. Dominant countries (rich) become more dominant (richer). Diversification is not conditioned by competitiveness.

Global Production Networks and (Distributional) Regional Development: The Cinnamon Industry in Karandeniya and Matale, Sri Lanka

2020 ◽  
Vol 15 (2) ◽  
pp. 209-237
Author(s):  
Eunyeong Song ◽  
Douglas R. Gress ◽  
Edo Andriesse
Keyword(s):  
Sri Lanka ◽  
Regional Development ◽  
Structural Changes ◽  
Value Added ◽  
Production Network ◽  
Production Networks ◽  
Global Production Networks ◽  
Exporting Firms ◽  
Global Production Network ◽  
Developmental Dynamics

The purpose of this article is to examine the multi-spatial and developmental dynamics of the cinnamon industry in Sri Lanka, the largest exporter in the world by value added. This contribution compares Karandeniya, a major traditional cultivating hub, and Matale, a region new to cinnamon cultivation, deploying a Global Production Network (GPN) framework inclusive of regional development considerations. Analyses, based on input from 23 semi-structured, in-depth interviews, examine the potential for all stakeholders to acquire equity or ‘how’ captured value influences the region ‘and’ individual actors over the course of development. Fieldwork reveals four upstream actors in the cinnamon industry, namely—farmers, peelers, collectors and exporting firms. Results indicate that the cinnamon boom led to strategic decoupling with the exporting firms in Colombo and subsequent strategic recoupling with other actors. The primary contribution of the research rests in the interpretation of resulting structural changes in each region from a bifurcated view of regional development. Based on regional economic growth, Karandeniya appears to be more successful. However, considering the extent of value distribution within the region, Matale is on a more inclusive trajectory vis-à-vis cinnamon exports. Based on these results, three implications for GPN theory and related development policy are suggested.

A value-added analysis of trade in Taiwan and Korea’s ICT industries

2016 ◽  
Vol 20 (1) ◽  
pp. 47-73
Author(s):  
Hsing-Chun Lin ◽  
Shih-Hsun Hsu ◽  
Ruey-Wan Liou ◽  
Ching-Cheng Chang
Keyword(s):  
Value Added ◽  
Information And Communications Technology ◽  
Value Chains ◽  
Input Output ◽  
Content Type ◽  
Cost Structures ◽  
A Value ◽  
The World ◽  
Ict Industry ◽  
Trade In Value Added

Purpose – The purpose of this paper is to extricate value-added exports in information and communications technology (ICT) industry earned by Taiwan and Korea. Additionally, the authors decompose Taiwan and Korea’s gross exports into various meaningful components. Design/methodology/approach – The authors use the inter-country input-output (ICIO) table which endows with cost structures of industries as well as trade information, facilitating in keeping track of the flow of products and value-added. The ICIO table used in this paper comes from the World Input-Output Database. The authors also use the way Wang et al. (2013) decomposed the intermediate goods exports into various components to provide further insights. Findings – The empirical results indicate that Taiwan and Korea’s ICT export to the world shrink by 47.8 and 40.9 percent when the trades are measured in value-added terms. Taiwan and Korea’s ICT export will also decrease by 75.1 and 57.8 percent. From the viewpoint of value added in trade, the share of value added embodied in Taiwan and Korea’s gross ICT exports continued to decrease and reached 24.9 and 42.2 percent in 2011, while the components of pure double counted terms kept growing in recent years. Originality/value – With global value chains flourishing in recent years, conventional trade statistics not only fails to highlight the vertical specialization among different countries, but also distorts the measurement of a country’s competitiveness. This paper extricates value-added exports in ICT industry earned by Taiwan and Korea and bring into focus the importance of trade in value added.

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