Economics & Finance / Macroeconomics / International Trade & Globalization

Global Value Chains - systematically elucidates empirical research, theoretical models

Global Value Chains

This literature review, available as source guide Global Value Chains, systematically elucidates empirical research, theoretical models, and policy analyses on how global value chains (GVCs) are reshaping international trade. The authors approach the topic from both macro and micro perspectives: at the macro level, they focus on using world input-output tables to measure cross-border production sharing and value-added trade flows; at the micro level, they focus on individual firm decisions, exploring how firms choose to participate in the global division of labor, establish supplier relationships, and cope with contractual frictions. The article further constructs a quantitative model covering multiple stages of production to assess the impact of globalization on national welfare. Finally, the article discusses the specificities of trade policy in the value chain environment, particularly the phenomenon of tariff escalation and the weakening effect of cross-border production networks on traditional trade interventions.