Functional specialisation and income distribution along global value chains

Riccio, Federico; Dosi, Giovanni; Virgillito, Maria Enrica

doi:10.1080/09535314.2024.2406877

Economic Systems Research

2024

DOI: 10.1080/09535314.2024.2406877

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Functional specialisation and income distribution along global value chains

Federico Riccio,

Giovanni Dosi,

Maria Enrica Virgillito

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2024

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Cited by 2 publications

References 75 publications

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The labour share along global value chains: perspectives and evidence from sectoral interdependence

Riccio,

Cresti,

Virgillito

2024

Rev World Econ

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This article proposes a novel framework to investigate how globalisation affects workers’ share of value added. We explore functional income distribution by looking at industrial interdependence and thus identifying Global Value Chains (GVCs) as the unit of analysis; we then track inputs’ composition and their labour share evolution along the value chains. First, we find widespread heterogeneous patterns across value chains’ components, accounting for the direct, domestic and foreign requirements of the chains, inside an overall declining trend in the vertical labour share. Second, through a shift-share analysis, we investigate what drives such decline in the vertical labour share: albeit country-industry idiosyncratic factors accounted by the within-input component contribute the most, between-input reallocation—GVCs restructuring—matters, particularly highlighting the role played by foreign contributions. Finally, through a parsimonious regression estimation, we confirm the main results found in the shift-share analysis highlighting the role played by countries’ development level and structural change towards services. In essence, we provide evidence of the recombination of inputs toward emerging economies and service-based activities. Such recombination negatively affects GVCs labour share dynamics. Overall, our methodology contributes to linking the processes of fragmentation of production and the changing international division of labour with the ensuing implications for functional income distribution.

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The labour share along global value chains: perspectives and evidence from sectoral interdependence

Riccio,

Cresti,

Virgillito

2024

Rev World Econ

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Unveiling the asymmetric effects: global value chain participation and income inequality

Jithin P

2024

Applied Economics

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Functional specialisation and income distribution along global value chains

Cited by 2 publications

References 75 publications

The labour share along global value chains: perspectives and evidence from sectoral interdependence

The labour share along global value chains: perspectives and evidence from sectoral interdependence

Unveiling the asymmetric effects: global value chain participation and income inequality

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