Tilting Towards South: Pattern and Determinants of Global Value Chains

Abstract

Geographical fragmentation of production process reoriented the attention of scholars towards the issues concerning international trade. From trade in goods the world is increasingly experiencing trade in tasks. The concerns of the countries are largely shifting towards increasing their share in global value-chains (GVC) for enhancing growth and employment opportunities. Therefore, it becomes important to examine the changing pattern of world production process. For the same, manufacturing sector of various developed and emerging economies is examined. It was found that the share from emerging countries in terms of value-added and domestic value-added content in gross exports has increased over the years as compared to G7 and other European Union (EU) countries. The paper also tried to econometrically examine the determinants of such change. It was also found that developed countries benefitted relatively more because of openness as compared to the manufactures belonging to emerging economies. The paper also discusses policy implications based upon systems of innovation approach.