Seminario di Roger Strange, University of Sussex

10.30 Sala Seminari – I° piano, Palazzo Levi Cases, Via del Santo 33

23.02.2017

The capture of value-added in global value chains

Seminario di  Roger Strange, University of Sussex 

Global value chains (GVCs) are a major phenomenon in the contemporary world economy. But who captures the value-added within GVCs, and thus who accrues the incomes from their proliferation? In this paper, we explore how the value-added generated within GVCs across a range of manufacturing sectors is distributed across countries, and provide some estimates as to how much of the value-added within each GVC is captured by the labour and capital factors. We also examine how the situation has changed over the period between 1995 and 2007 (the latest year for which the necessary data are available) and draw attention to various underlying trends. In particular, we find that capital (broadly defined to include physical, intangible and financial capital) has captured a large and increasing share of the value-added in manufacturing GVCs. It thus appears that the major beneficiaries of the ongoing international fragmentation of production are the providers of capital, rather than labour within developing countries.  The final step in the analysis is not yet complete, but will involve decomposing the capital returns according to whether the capital is domestically-owned or foreign-owned. In short, we aim to highlight the importance of the governance of GVCs, and the necessity of considering not just the location of GVC activities but also who controls these activities.