DSA2018: Global inequalities
As end markets in the global South - and domestic and regional value chains - have grown, a pattern of polycentric trade has emerged. Building on earlier research on North-South value chains, this session explores prospects for development in the context of multiple, overlapping value chains.
Global value chains, and related global production networks, analysis has made valuable insights into the linkages that transform raw materials into final products and services, illustrating how value is created, and also differentially captured. A common, and arguably dominant, perspective amongst GVC and GPN scholars and policymakers has been an implicit focus on global trade involving North-South flows, stretching from initial stages of production in the global South to end markets in the global North.
Now, however, whether it be the prominence of the global South in manufacturing exports, its growing share of consumption or the fact that the dominant trade direction is now South-South rather than South-North, considerable change is afoot. Rather than emphasizing North-South oriented value chains/production networks, contemporary trade involves overlapping, multiple production networks oriented towards different end markets - domestic, regional and global - across both global North and South.
This session invites papers that explore shifting geographies of trade and which consider the existence of multiple, and often overlapping value chains and production networks, which include those targeted towards end markets in the global South. Topics could include, but are not limited to:
• Conceptualising polycentric value chains/production networks
• Domestic and Regional, as well as global, end markets
• New lead firms
• Standards in Southern end markets
• Network segmentation, switching and diversification
• Development strategies and outcomes (economic, social, environmental) across multiple value chains
This panel is closed to new paper proposals.
Labour standards and social contracts in China, India and Brazil
This paper explores how the engagement with global labour standards is co-shaped by national social contracts in China, India and Brazil. It presents primary and secondary data to better understand different attitudes towards standards setting and compliance practices among actors.
This paper explores how the engagement with global labour standards is co-shaped by national social contracts in China, India and Brazil. Such a social contract includes the formal and informal institutional arrangements, rules and norms in a society, and refers among others to historically and culturally shaped expectations concerning (minimally) acceptable social behaviour by various actors. The divisions of tasks and responsibilities to adhere to the social contract between states, firms and civil society organisations significantly differ between China, India and Brazil. Moreover, these divisions of tasks and responsibilities change over time, due to among others internal political dynamics and because the increasingly important role of these emerging economies in the global arena.
States, firms and civil society organisations in these three large emerging economies are increasingly engaged with global labour standards. Not only as supplier countries that need to comply with standards set by global value chain leaders and northern NGOs and states, but increasingly also in co-shaping the setting of a new generation of standards. The paper aims to show how differences in the social contracts of China, Brazil and India help us to better understand different attitudes towards standards setting and compliance practices among actors in these three Rising Powers.
Measuring Governance and Upgrading across Market Trajectories: Noth-South vs. South-South value chains
The paper presents a quantitiative study design to measure product, process, and functional upgrading, as well as internal and external governance. This is achieved using firm-level export data over a 10-year period for the Kenyan leather and garment value chains.
Drawing on disaggregated export transaction data over a 10-years period (2006-2015), this paper analyses the relationship between market trajectories, governance, and upgrading among Kenyan suppliers at all levels of the leather value chain (possibly, this may be extended to the garment and apparel value chain too).
This study represents a first attempt at quantifying governance relationships by assessing the dyadic stability of buyer-supplier exchanges. Moreover, using unit values as an indicator of product upgrading and HS coding as an indicator of functional upgrading, the correlation between market trajectories and upgrading is further assessed. Methodologically, this is achieved by means of a linear probability model combining between- and within-firm analysis through pooled OLS and Fixed Effect (FE) models. The impact of industrial policy on upgrading is further established through the adoption of a FE difference-in-differences model. Generalised ordered logit is used to establish the robustness of the outcome.
Final results show how participation in South-North, South-South, and regional value chains display very different dynamics in terms of governance and upgrading. While suppliers involved in South-North value chains experience higher degrees of product upgrading, they fail to functionally upgrade. Conversely, regional and local value chains witness most of the value addition. Moreover, larger suppliers establish more stable and integrated governance ties with increasing access to mid-levels of processing. Yet, upgrading into manufacturing is characterised by smaller firms with less direct ties, usually embedded in South-South and regional value chains.
The effects of India and China on the production of sustainable palm oil in Indonesia: Towards a better understanding of the implications of power dynamics in regional value chains for sustainability
The exploration of the dynamics of India's and China's relationships with their supplier base derived from palm oil industry. Ensuing in detailed accounts of how India and China govern regional palm oil value chains and its implication on the promotion of sustainable palm oil in Indonesia.
Most of the literatures that have extensively discussed the emergence of China and India in global economy view both economies as the supplier base in the global value chains. Very little illustration has been created about the role of these emerging countries as buyers; and how they govern regional value chains. This paper explores the dynamics of India's and China's relationship with their supplier base by collecting an empirical dataset on palm oil industry in Indonesia. At present, much of the discussion on Indonesian palm oil has been focused on the sustainability within the nexus Indonesia-Europe at the market-driven initiative of Roundtable on Sustainable Palm Oil (RSPO). Recently however, there has been a growing awareness of the increasing importance of China's and India's role as the two largest importers of Indonesian palm oil. It has been found that the governance of regional palm oil value chains led by buyers from India and China is generally less intense compared to Europe. The aforementioned phenomenon reflects particularly in the lower level of the requirements on sustainable production. The still urgent national interest of India and China to feed their people compel them to reckon price, quality and food security over sustainability issues. That evidence provides both threats and opportunities for the sustainability of Indonesian palm oil industry. The aim of this paper is mainly to highlight on the opportunities for Indonesia to establish a producers-driven initiative for promoting sustainable palm oil and to obtain its recognition within regional value chains.
When global production networks meet domestic political economy: protectionism, collaboration, and global 'green race'
Two trends are notable in green energy transition, rising protectionism and expansion of global production networks. We use Chinese wind and solar MNCs' activity in Africa as case to illustrate how companies are exploiting various strategies to adapt to the different systems.
The fast growing green energy technologies and their worldwide deployment has profound impact on the political economy of the green transformation. On the one hand, there is a rising state protectionism among nearly all the renewable energy super powers (the US, China, the EU, Indian, Japan, etc.) as countries trying to deter foreign competitors in their domestic market in the hope of nurturing national champions on green energy technology. Consequently, increasing number of trade disputes can be noted around solar panels and wind turbines among these countries (Lewis, 2014). On the other hand, renewable multinational corporations (R-MNCs) from these nations dominate different parts of value chain, and are found collaborating actively in exploring overseas market according to their comparative advantages, as manufacturer, technology supplier, or project developer. There is notable coexistence of the global 'green race' and division of labour (Lachapelle et al, 2017). The world of clean development can be therefore largely grouped into highly protective markets dominated by domestic actors and highly open market with dominated by renewable MNC's global production networks.
What implications can be drawn from this due system? In particular, what is the role of emergent market MNCs in the renewable sectors in shaping and adapting to this state-led protectionist or market-led competitive (collaborative) markets? In this research I will use Chinese wind and solar R-MNC's strategy in African markets as an example to illustrate how these companies exploit both state protectionist policies and global production networks to nurture its competitive advantage.
This panel is closed to new paper proposals.