Mapping Global Value Chains

Backer, Koen De; Miroudot, Sébastien

doi:10.2139/ssrn.2436411

Cited by 107 publications

(43 citation statements)

References 23 publications

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“…(2014) and widely used in subsequent studies such as Timmer et al. (2014) or Backer and Miroudot (2013):

V A E = V {(I - A)}^{- 1} E,

where VAE denotes a (NS × 1) vector of value‐added exports for country N/industry S, V denotes a (NS × NS) diagonal matrix with diagonal entries being the value‐added share for each county/industry in IO table, I denotes a (NS × NS) identity matrix, A is (NS × NS) input coefficient matrix in IO table and E a (NS × 1) vector of gross export value in IO table.…”

Section: Economy‐wide Smile Curve and Prima Facie Evidencementioning

confidence: 99%

The smile curve: Evolving sources of value added in manufacturing

Ito

2021

Canadian J of Economics

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A dramatic disordering of global manufacturing has been seen in recent years. Production processes have fragmented, and many production stages have been offshored to developing nations. Organization of this new global supply chain has evolved into what are often called global value chains (GVCs). Less studied, but no less important, is the shift in the sectoral source of value added in manufactured exports. This phenomenon, often called the “smile curve,” involves a swing in the share of value added in manufactured exports that is generated in the manufacturing sector itself instead of, for example, in the pre‐ and post‐fabrication stages. Our paper presents new evidence quantifying the magnitude of the smile curve notion. Using international input–output databases, we find evidence supporting the smile curve at the aggregate level. Specifically, for almost all exporting sectors and nations, we find that the value added to exports has shifted decisively from the manufacturing sector to service sectors. We also find that developing countries reduced their own‐sourcing service value‐added share, while developed countries maintained their relatively high levels of own‐sourcing service value‐added share.

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“…(2014) and widely used in subsequent studies such as Timmer et al. (2014) or Backer and Miroudot (2013):

V A E = V {(I - A)}^{- 1} E,

Section: Economy‐wide Smile Curve and Prima Facie Evidencementioning

confidence: 99%

The smile curve: Evolving sources of value added in manufacturing

Ito

2021

Canadian J of Economics

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“…This measure that reflects such multi-country considerations captures by looking at a recursive measure of I2E on the sourcing side is the length of value chain sourcing (Fally 2011, De Backer & Miroudot 2013. The TiVA data provide a handy means for comparing the average number of production stages in a given industry and country.…”

Section: Full Decomposition Of Foreign Value Addedmentioning

confidence: 99%

Research Methods of Assessing Global Value Chains

Dutta

2021

Preprint

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“…Value chains' maps from GVC literature are often based on trade in value-added data, calculated by international institutions [8] based on international input–output tables. These sorts of data have been assessed by many authors, such as Johnson and Noguera (2012), Banga (2013), De Backer and Miroudot (2013), Koopman et al (2014), Timmer et al (2014), Baldwin and Lopez-Gonzalez (2015). Smiling curves drawn from these country datasets are not in terms of activities performed by the country at each industry, not even in the value-added databases for MNC trade, such as the AMNE/OCDE (Cadestin et al , 2018a, 2018b).…”

Section: Theoretical Approach: Contribution Of Cost Structure Analysi...mentioning

confidence: 99%

“…In the 21st century, global value chains (GVC) have become a hot topic in both government and corporate strategies. The increasing complexity of international production networks for goods and services (De Backer and Miroudot, 2013) impacts countries' development and firms' investments and profits (World Bank, 2020; WTO, 2019). However, mapping GVCs is difficult due to the variety of data needed regarding actors, tasks and activities, governance schemes and other determinants both at the firm and country levels.…”

Section: Introduction [1]mentioning

confidence: 99%

Value chains of the world's top manufacturing corporations: moving from tangible to intangible activities?

Reis

Souza

Araújo

et al. 2020

JMTM

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PurposeThis paper aims to investigate if the world top manufacturing corporations' cost structures are moving from tangible to intangible activities and their impact on profitability.Design/methodology/approachThe theoretical approach is interdisciplinary, combining global value chains, international manufacturing networks, cost management literatures. The empirical approach has a sample out of financial statements' data from 220 multinational corporations between 2006 and 2017, grouping them by technological intensity. It is created the “COGS-share” indicator – the ratio between the costs of goods sold and overall costs and expenses – as a proxy for the firms' expenses of tangible and intangible value chain activities. It is tested as an explanatory variable for the companies' profits through dynamic panel data econometric models.FindingsThe results show that the cost structure still is very concentrated in tangibles. Though costs of both tangible and intangible activities negatively impact profits, they affect value generation differently: the higher the share of intangible in comparison to tangible activities in overall cost and expenses, the greater the profits in most manufacturing groups, regardless of their technological intensity.Research limitations/implicationsThe empirical analysis simplifies the composition of value chains per activity because financial statements data are aggregates, preventing detailed analysis by markets, business units or products. Stocks' levels are assumed to be at the desired level during the time series. The dataset does not allow value curves to be drawn because direct wages' data and more precise information on cost (especially deferred assets and wages) are missing.Practical implicationsThe presented approach, particularly the COGS-share indicator, contribute to assess value generation from activities for improving corporate strategies and public policies on operations and cost management of global value chains.Social implicationsSupporting upgrading decisions that impact value production, allocation and distribution between workers, firms and countries.Originality/valueInterdisciplinary theoretical and empirical assessment of the manufacturing companies' cost structures and profits based on financial statements data for the better understanding of value generation from tangible and intangible activities.

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Mapping Global Value Chains

Cited by 107 publications

References 23 publications

The smile curve: Evolving sources of value added in manufacturing

The smile curve: Evolving sources of value added in manufacturing

Research Methods of Assessing Global Value Chains

Value chains of the world's top manufacturing corporations: moving from tangible to intangible activities?

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