Global Value Chains, Governance, and Upgrading Processes: Firm-Level Evidence from Italy

Brancati, Emanuele; Brancati, Raffaele; Maresca, Andrea

doi:10.2139/ssrn.2512641

Cited by 4 publications

(3 citation statements)

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“…Besides, the internalization through participation in global value-chains (GVC) while facilitating productivity and growth may also lead to lesser diversification and create additional risks for a firm, especially if it is included in the lower-end of GVC (Altomonte et al, 2012, Baldwin (ed. ), 2009; Brancati et al, 2015).…”

Section: Introductionmentioning

confidence: 99%

The Role of Innovation and Globalization Strategies in Post-Crisis Recovery

Golikova

Kuznetsov

2016

SSRN Journal

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THE ROLE OF INNOVATION AND GLOBALIZATION STRATEGIES IN POST-CRISIS RECOVERY 3The aim of the research is to conduct an empirical investigation and reveal what types of globalization and innovation strategies in turbulent and unfavorable regional institutional environment are most likely to be associated with different trajectories of Russian manufacturing firms' performance in 2007-2012. We employ the results of empirical survey of 1000 medium and large enterprises in manufacturing ( 2009) linked to financial data from Amadeus database and the data on the regional institutional environment. We test that (1) introduction of innovations before the crisis ceteris paribus helped the firms to successfully pass the crisis and recover. We expect that (2) companies that became globalized before the crisis (via importing of intermediate and capital goods; exporting; FDI; establishment of partner linkages with foreign firms) ceteris paribus are more likely to successfully pass the crisis and grow. And (3) propose the positive effect of synergy of innovation efforts and globalization strategy of the firm. We expect that the abovementioned factors are complimentary and reinforce the ability of the firm to recover after crisis shock. We found strong support for the hypothesis that firms financing introduction of new products before the crisis and simultaneously managed to promote and sell them on the global market were rewarded by quick return to the growing path after global crisis. Other strategies, i.e. solely innovations without exporting play insignificant role while exporting without attempts to introduce new products contribute even negatively to post-crisis recover. Institutional environment also matters: in the regions with less level of corruption firms were more likely to grow after the crisis.

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Section: Introductionmentioning

confidence: 99%

The Role of Innovation and Globalization Strategies in Post-Crisis Recovery

Golikova

Kuznetsov

2016

SSRN Journal

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“…With the rise of GVC research, some scholars have started to analyse this issue from the perspective of enterprise participation in GVCs. Brancatia, Brancatib, and Marescab () find that the participation of enterprises in GVCs can significantly improve the productivity level of enterprises, and this effect is more significant in those suppliers of high‐quality products importing cheap imported intermediaries. Baldwin and Yan () find the existence of a productivity enhancement effect of participation in the GVC by using the PSM–DID method, and the effect is more significant when trading with high‐income countries.…”

Section: Literature Reviewmentioning

confidence: 99%

Does global value chain engagement improve firms' wages: Evidence from China

Xie

et al. 2019

World Economy

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This would imply that the welfare effect analysis of trade should shift towards intra-product trade. Accompanied by the recent burgeoning literature on measuring value-added trade, value creation and profit distribution among various stages in the GVC have attracted increasing attention, including research on the effects of intra-product trade on labour wages. Grossman and Rossi-Hansberg (2008) is the first study to explore the impact of outsourcing on wages, by developing an offshore outsourcing model and decomposing the economic impact of decreasing outsourcing costs into the productivity effect, relative price effect and labour supply effect. The productivity effect enhances the welfare level of low-skilled workers, while the relative price and labour supply effects suppress the welfare level of low-skilled workers. To the best of our knowledge, there is little theoretical and quantitative research on the wage effects of China's increasing engagement in the GVC, particularly at the firm level. Our analysis supplements this part with calculating firms' GVC embedment and then analysing the effect of the GVC embedment on firms' wage.This study uses the merged data of Chinese customs transaction-level trade database and Chinese Annual Survey of Industrial Firms database, covering the universe of Chinese exporters in the period 2000-06, to examine whether and how GVC engagement influences firms' wage.The main contributions of our research are as follows: (a) We innovatively examine whether and how a firm's GVC engagement affects firms' wages. Compared with previous studies, which analyse whether a firm enters the export market or not and how this affects wages, our study is more comprehensive by incorporating these aspects from the perspective of GVC. (b) Specifically, our transaction-level data allow us to measure GVC engagement at firm level over time, which complements the literature on the wage effect of the GVC at industry and aggregate levels (Costinot, Vogel, & Wang, 2012;Lopez Gonzalez, Kowalski, & Achard, 2015), and thereby minimise aggregation bias by giving expression to firm heterogeneity. (c) Finally, we examine the heterogeneous impact of a firm's GVC engagement by distinguishing different ownership and factor intensity.The rest of the paper proceeds as follows. Section 2 presents the theoretical analysis and hypotheses. Section 3 describes the empirical specification, data source and the measurements. Section 4 discusses the empirical results, and Section 5 presents an extended analysis. Section 6 is this paper's conclusion. |

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“…Still, to my knowledge, the evidence that relates the different modes of a firm's organisational structure in global production networks (intra‐firm or arm's‐length trade) with GVC upgrading measured by domestic value added in exports has yet to be fully explored. Based on a rich survey database for Italian companies, Brancati, Brancati, and Maresca () observe that mere integration into a GVC is insufficient for a company to prosper since the form of GVC governance considerably influences firms’ chances of upgrading. The authors note that the probability of innovation (as a measure of upgrading) is higher for final producers and firms connected through a relational type of GVC governance.…”

Section: Related Research Literaturementioning

confidence: 99%

The DNA of the domestic value added (DVA) in exports: Firm‐level analysis of DVA in exports

Vrh

2019

World Economy

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This paper sheds light on the relationship between domestic value added in exports (DVA) and the different ways firms participate in GVCs by exploiting a detailed firm‐level data set for the whole population of Slovenian exporting firms for the period 2002–14. The paper draws attention to those firm characteristics that allow a greater share of DVA to be captured. Although reliance on industry‐level data from input–output tables is the most common way of doing this in the literature, this paper develops a method for estimating DVA in exports using firm‐level data by adapting the approach taken by Kee and Tang (2016). The paper finds that in terms of DVA, domestic‐owned exporting firms outperform more productive foreign‐owned firms and that firms not affiliated with permanent suppliers from abroad capture higher DVA in exports. Positive outcomes of DVA in exports can be observed, all else being equal, for firms with a larger share of intangible capital per worker and firms with a smaller share of exports based on imports of the same products. The results also show that when exporting more to less demanding markets, like the countries of former Yugoslavia, firms benefit more in terms of greater DVA gains in exports.

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Global Value Chains, Governance, and Upgrading Processes: Firm-Level Evidence from Italy

Cited by 4 publications

References 95 publications

The Role of Innovation and Globalization Strategies in Post-Crisis Recovery

The Role of Innovation and Globalization Strategies in Post-Crisis Recovery

Does global value chain engagement improve firms' wages: Evidence from China

The DNA of the domestic value added (DVA) in exports: Firm‐level analysis of DVA in exports

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