Uneven Development Patterns in Global Value Chains: An Empirical Inquiry Based on a Conceptualization of GVC As a Specific Form of the Division of Labor

There are currently two principal groups of researchers utilizing the Global Value Chains (GVC) framework. On the one hand, policy institutions provide the standard measurements of GVC involvement [OECD 2013: 12; de Backer and Miroudot 2014: p. 11-16; Gagnes et al 2015: 115; UNCTAD 2013: 135-136] and conduct cross-country analysis to formulate policy recommendations. On the other hand, scholars from various disciplines elaborate on GVCs and GVC-related concepts (Antras, 2014; Yeung & Coe, 2015; Milberg and Winkler, 2013; Ponte & Sturgeon, 2014). Unfortunately, the former group (policy institutions) often carry out their measurements with at best a rough and imprecise link to the recent achievements of academic theorists. As stated by Gereffi, “much of the literature that uses the GVC moniker misses the point and doesn’t apply the framework consistently” (Gereffi 2014: 27). Meanwhile, most of the scholars have not yet completely managed to address the theoretical challenges associated with new empirical discussions and policy debates. Moreover, since critical views on GVCs are usually made by theorists, there is a need to forge concepts that could be statistically mobilized in order to provide empirical support for critical approaches to GVCs.

This contribution proposes to overcome the disjuncture between theory and macro, multi-country measurements. It offers some original findings concerning the relation between countries’ GVC participation and economic and social upgrading. The first section addresses the limitations of GVC theorization and measurement and proposes to conceptualize GVCs as a specific form of the division of labor, distinct from both market coordination and firms’ internal activities. One achievement of this definition is to allow for a precise delimitation of the frontiers of GVCs and, accordingly, to propose a proper measure of GVC participation (section 2) and present some stylized facts which do not support the narrative of international institutions concerning GVC participation and upgrading (section 3). We then draw on various strands of literature to delineate six possible country development patterns (Labor-led upgrading, Profit-led upgrading, Rentier’s dominated integration, Immiserizing growth, Marginalization, Non-GVC upgrading) depending on the intensity of GVC participation and changes in productive efficiency, value capture and socioeconomic variables (section 4). Relying on trade data and standard indicators of economic and social upgrading from the World Input-Output Database (WIOD), the OECD and the World Bank, we carry out a principal component analysis for 57 countries between 1995 and 2011 (section 5). Our results challenge the dominant narrative of a clear positive relation between GVC participation and social and economic upgrading. They instead describe a much more nuanced and contrasted relation reflecting the unevenness of power positions in the GVC form of division of labor.