Publication:
Conceptual Aspects of Global Value Chains

Loading...
Thumbnail Image
Files in English
English PDF (2.13 MB)
2,868 downloads
English Text (133.85 KB)
91 downloads
Published
2020-01
ISSN
Date
2020-01-23
Author(s)
Editor(s)
Abstract
The paper offers an overview of some key conceptual aspects associated with the rise of global value chains (GVCs). It outlines a series of alternative interpretations and definitions of what the rise of GVCs entails, and it traces the implications of these alternative conceptualizations for the measurement of the phenomenon, as well as for elucidating the key determinants and implications of GVC participation, both at the country level and at the firm level. In the process, the paper offers some speculative thoughts about the future of GVCs in light of the advent of an array of new technologies.
Link to Data Set
Citation
Antras, Pol. 2020. Conceptual Aspects of Global Value Chains. Policy Research Working Paper;No. 9114. © World Bank. http://hdl.handle.net/10986/33228 License: CC BY 3.0 IGO.
Associated URLs
Associated content
Report Series
Report Series
Other publications in this report series
  • Publication
    The Economic Value of Weather Forecasts: A Quantitative Systematic Literature Review
    (Washington, DC: World Bank, 2025-09-10) Farkas, Hannah; Linsenmeier, Manuel; Talevi, Marta; Avner, Paolo; Jafino, Bramka Arga; Sidibe, Moussa
    This study systematically reviews the literature that quantifies the economic benefits of weather observations and forecasts in four weather-dependent economic sectors: agriculture, energy, transport, and disaster-risk management. The review covers 175 peer-reviewed journal articles and 15 policy reports. Findings show that the literature is concentrated in high-income countries and most studies use theoretical models, followed by observational and then experimental research designs. Forecast horizons studied, meteorological variables and services, and monetization techniques vary markedly by sector. Estimated benefits even within specific subsectors span several orders of magnitude and broad uncertainty ranges. An econometric meta-analysis suggests that theoretical studies and studies in richer countries tend to report significantly larger values. Barriers that hinder value realization are identified on both the provider and user sides, with inadequate relevance, weak dissemination, and limited ability to act recurring across sectors. Policy reports rely heavily on back-of-the-envelope or recursive benefit-transfer estimates, rather than on the methods and results of the peer-reviewed literature, revealing a science-to-policy gap. These findings suggest substantial socioeconomic potential of hydrometeorological services around the world, but also knowledge gaps that require more valuation studies focusing on low- and middle-income countries, addressing provider- and user-side barriers and employing rigorous empirical valuation methods to complement and validate theoretical models.
  • Publication
    The Macroeconomic Implications of Climate Change Impacts and Adaptation Options
    (Washington, DC: World Bank, 2025-05-29) Abalo, Kodzovi; Boehlert, Brent; Bui, Thanh; Burns, Andrew; Castillo, Diego; Chewpreecha, Unnada; Haider, Alexander; Hallegatte, Stephane; Jooste, Charl; McIsaac, Florent; Ruberl, Heather; Smet, Kim; Strzepek, Ken
    Estimating the macroeconomic implications of climate change impacts and adaptation options is a topic of intense research. This paper presents a framework in the World Bank's macrostructural model to assess climate-related damages. This approach has been used in many Country Climate and Development Reports, a World Bank diagnostic that identifies priorities to ensure continued development in spite of climate change and climate policy objectives. The methodology captures a set of impact channels through which climate change affects the economy by (1) connecting a set of biophysical models to the macroeconomic model and (2) exploring a set of development and climate scenarios. The paper summarizes the results for five countries, highlighting the sources and magnitudes of their vulnerability --- with estimated gross domestic product losses in 2050 exceeding 10 percent of gross domestic product in some countries and scenarios, although only a small set of impact channels is included. The paper also presents estimates of the macroeconomic gains from sector-level adaptation interventions, considering their upfront costs and avoided climate impacts and finding significant net gross domestic product gains from adaptation opportunities identified in the Country Climate and Development Reports. Finally, the paper discusses the limits of current modeling approaches, and their complementarity with empirical approaches based on historical data series. The integrated modeling approach proposed in this paper can inform policymakers as they make proactive decisions on climate change adaptation and resilience.
  • Publication
    Rigging the Scores: Corruption through Scoring Rule Manipulation in Public Procurement Auctions
    (Washington, DC: World Bank, 2025-12-02) Chen, Qianmiao
    Public procurement is highly susceptible to corruption, especially in developing countries. Although open auctions are widely adopted to curb it, this paper finds that corruption remains prevalent even within this procurement format. Procurement officers can collaborate with firms to manipulate scoring rules, ensuring predetermined winners, while corrupt firms submit noncompetitive bids to meet minimum bidder requirements. Using extensive data from Chinese public procurement auctions, the paper introduces model-driven statistical tools to detect such corruption, identifying a corruption rate of 65 percent. A procurement expert audit survey confirms the tools’ reliability, with a 91 percent probability that experts recognize suspicious scoring rules when flagged. Firm-level analysis reveals that local, state-owned, and less productive firms are favored in corrupt auctions. Lastly, the paper explores policy implications. Analysis of the national anti-corruption campaign since 2012 suggests that general investigations may be insufficient to address deeply ingrained corrupt practices. Using counterfactuals based on an estimated structural model, the paper shows that implementing anonymous call-for-tender evaluations could improve social welfare by 10 percent by eliminating suspicious rules and encouraging broader participation.
  • Publication
    Labor Demand in the Age of Generative AI: Early Evidence from the U.S. Job Posting Data
    (Washington, DC: World Bank, 2025-11-18) Liu, Yan; Wang, He; Yu, Shu
    This paper examines the causal impact of generative artificial intelligence on U.S. labor demand using online job posting data. Exploiting ChatGPT’s release in November 2022 as an exogenous shock, the paper applies difference-in-differences and event study designs to estimate the job displacement effects of generative artificial intelligence. The identification strategy compares labor demand for occupations with high versus low artificial intelligence substitution vulnerability following ChatGPT’s launch, conditioning on similar generative artificial intelligence exposure levels to isolate substitution effects from complementary uses. The analysis uses 285 million job postings collected by Lightcast from the first quarter of 2018 to the second quarter of 2025Q2. The findings show that the number of postings for occupations with above-median artificial intelligence substitution scores fell by an average of 12 percent relative to those with below-median scores. The effect increased from 6 percent in the first year after the launch to 18 percent by the third year. Losses were particularly acute for entry-level positions that require neither advanced degrees (18 percent) nor extensive experience (20 percent), as well as those in administrative support (40 percent) and professional services (30 percent). Although generative artificial intelligence generates new occupations and enhances productivity, which may increase labor demand, early evidence suggests that some occupations may be less likely to be complemented by generative artificial intelligence than others.
  • Publication
    Investment Policy Reforms and Foreign Direct Investment Inflows
    (Washington, DC: World Bank, 2025-12-01) Fwaga, Sammy; Chakrapani, Deepa; Abebe, Girum
    Foreign direct investment has the potential to introduce much-needed capital and expertise in emerging and developing economies. To attract foreign direct investment, many countries have eased restrictions on foreign ownership in various sectors, reformed their institutions, and set up investment promotion agencies. Until the mid-2010s, Ethiopia remained one of the few countries that resisted this trend, with several stringent restrictions in place on foreign direct investment entry and operations in the country. This study employs a synthetic control method to examine patterns in foreign capital inflows following a series of investment policy reforms that were substantively introduced in the mid-2010s (circa 2015). The study offers evidence that investment policy reforms contributed to a significant foreign direct investment inflow in Ethiopia, compared to what would have occurred in the absence of these policies. An alternative strategy that conservatively specifies the donor country pool using an AI-assisted deep search technique changes the donor pool weighting matrix of the synthetic control method, but the estimated policy effects largely remain robust to this specification. The findings highlight the importance of targeted reforms in promoting foreign direct investment inflow in developing countries.
Journal
Journal Volume
Journal Issue

Related items

Showing items related by metadata.

  • Publication
    Joining, Upgrading and Being Competitive in Global Value Chains: A Strategic Framework
    (World Bank, Washington, D.C., 2013-04) Cattaneo, O.; Gereffi, G.; Miroudot, S.; Taglioni, D.
    In recent years, global value chains have played an increasing role in business strategies, profoundly affecting international trade and development paradigms. Global value chains now represent a major source of socio-upgrading opportunities and a new path for development. Trade, competitiveness and development policies should be reshaped accordingly to seize these opportunities and avoid the risks associated with greater participation in global value chains. This paper provides a framework and analytical tools for measuring and improving a country's performance with respect to participation in global value chains. With a clear operational focus, it provides guidance for countries willing to join, maintain participation, and/or move up global value chains. With the ultimate objective to increase the value (the development content) for trade, it also offers strategies to maximize the benefits and minimize the risks of developing countries' participation in global value chains.
  • Publication
    Building Competitiveness in Africa's Agriculture : A Guide to Value Chain Concepts and Applications
    (World Bank, 2010) Webber, C. Martin; Labaste, Patrick
    The development and business communities involved in the African agriculture and agribusiness sectors have recently experienced a strong resurgence of interest in promoting value chains as an approach that can help design interventions geared to add value, lower transaction costs, diversify rural economies, and contribute to increasing rural household incomes in Sub-Saharan Africa (SSA) countries. Enhancing value chain competitiveness is increasingly recognized as an effective approach to generating growth and reducing the rural poverty prevalent in the region. This is a welcome development for practitioners who have long been convinced of the need to look differently at agriculture not just as a means of survival, but as smaller or larger commercial businesses linked to domestic and global markets and of the need to identify and tap into new sources of potential growth and value addition in the sector. Hopefully, renewed engagement will lead to a substantial increase in the flow of financial resources and technical assistance devoted to supporting market-driven, competitive agro-enterprises and agricultural value chains throughout the African continent. However, there is danger that this renewed engagement may not last, or may even backfire, if the high expectations placed on promoting value chains are not met. Because the development literature is not clear about the concepts and methods relating to value chains, there is risk that sooner or later the benefits of the value chain approach will be overshadowed by unmet expectations. That in turn could cause the approach to be discarded categorically. Although there is no single way to mitigate such risks, this guide aims to offer practical advice and tools to businessmen, policy makers, representatives of farmer or trade organizations, and others who are engaged in SSA agro-enterprise and agribusiness development. This guide is particularly designed for those who want to know more about value chain based approaches, and how to use them in ways that can contribute to sound operational decisions and results for enterprise and industry development, as well as for policy making with respect to doing business, stimulating investment, and enhancing trade in the context of African agriculture.
  • Publication
    Global Value Chains in the Electronics Industry : Was the Crisis a Window of Opportunity for Developing Countries?
    (2010-09-01) Sturgeon, Timothy J.; Kawakami, Momoko
    This paper presents evidence of the importance of electronics global value chains (GVCs) in the global economy, and discusses the effects of the recent economic crisis on the industry. The analysis focuses on how information is exchanged and introduces the concept of "value chain modularity." The authors identify three key firm level actors -- lead firms, contract manufacturers, and platform leaders -- and discuss their development, or "co-evolution" in the context of global integration. Company, cluster, and country case studies are then presented to illustrate how supplier capabilities in various places have developed in the context of electronics global value chains. The findings identify some of the persistent limits to upgrading experienced by even the most successful firms in the developing world. Four models used by developing country firms to overcome these limitations are presented: (1) global expansion though acquisition of declining brands (emerging multinationals); (2) separation of branded product divisions from contract manufacturing (original design manufacturing (ODM) spinoffs); (3) successful mixing of contract manufacturing and branded products (platform brands) for contractors with customers not in the electronic hardware business; and (4) the founding of factory-less product firms that rely on global value chains for a range of inputs, including production (emerging factory-less start-ups).
  • Publication
    Global Value Chain Integration and Productivity
    (World Bank, Washington, DC, 2015-02-26) Winkler, Deborah; Farole, Thomas
    In order to adequately measure a firm’s participation in GVCs in this context, it is important to first identify the different forms through which GVC integration can affect domestic firms’ productivity. Integrating a country’s domestic suppliers into GVCs increases the possibility for productivity gains through exporting to a buyer abroad or supplying to a multinational in the country. But countries should not neglect the opportunities for productivity gains that GVC participation can provide from a buyer’s perspective. Instead of building a complete array of supply chains at home, firms can join existing supply chains of multinationals through cross-border trade in intermediates and components (Taglioni and Winkler 2015). While Farole and Winkler (2014) focus on the productivity spillovers from multinationals in a country, this note looks at the impact of cross-border sales to international buyers (exporting) or purchases of inputs from international sellers (importing) in GVCs. This note is structured as follows. Section two reviews the relevant literature with regard to productivity effects from GVC participation as well as the role of domestic firm characteristics in this context. Section three introduces the data and econometric model. In section four the author presents our regression results, while section five concludes.
  • Publication
    Greening Global Value Chains : Innovation and the International Diffusion of Technologies and knowledge
    (World Bank, Washington, DC, 2013-05) Glachant, Matthieu; Dussaux, Damien; Ménière, Yann; Dechezleprêtre, Antoine
    Using novel data on patents, trade of equipment goods, and foreign direct investments and insights from the economic literature, the paper seeks to lay out the state of knowledge on the role of innovation and the diffusion of technologies in the greening of global value chains as well as some of the main policy issues. A special emphasis is put on developing countries -- distinguishing emerging economies and least-developed countries -- and on climate-mitigation technologies. Emerging economies are already reasonably well integrated in the global economy. As a consequence, technologies flow in through the imports of capital goods and local investments by multinational enterprises owning technologies. Pushing further technology transfer requires strengthening intellectual property rights, lowering barriers to trade and investments and improving technological absorptive capacities. In contrast, their role in innovation is limited. Standard tools of innovation policy - public research and development, public support to private research and development, better access to finance - should develop. But studies also suggest that governments should introduce more stringent environmental policies with proper enforcement at home to go beyond the adoption of foreign technologies. The situation of least-developed countries is very different: they do not import green technologies and low barriers to trade and foreign direct investment or strict intellectual property rights are unlikely to trigger technology transfer. In these countries, the focus should be on building technological capacities.

Users also downloaded

Showing related downloaded files

  • Publication
    World Development Report 2006
    (Washington, DC, 2005) World Bank
    This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.
  • Publication
    Classroom Assessment to Support Foundational Literacy
    (Washington, DC: World Bank, 2025-03-21) Luna-Bazaldua, Diego; Levin, Victoria; Liberman, Julia; Gala, Priyal Mukesh
    This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.
  • Publication
    Lebanon Economic Monitor, Fall 2022
    (Washington, DC, 2022-11) World Bank
    The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.
  • Publication
    Argentina Country Climate and Development Report
    (World Bank, Washington, DC, 2022-11) World Bank Group
    The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.
  • Publication
    Digital Africa
    (Washington, DC: World Bank, 2023-03-13) Begazo, Tania; Dutz, Mark Andrew; Blimpo, Moussa
    All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.