Regional Dynamics in Global Production Sharing: Evidence from “Factory South America”

Marília Bassetti Marcato ()
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Marília Bassetti Marcato: Universidade Federal do Rio de Janeiro

The European Journal of Development Research, 2023, vol. 35, issue 5, No 8, 1173-1196

Abstract: Abstract The global value chain (GVC) literature has recognized the regional linkages of global production sharing while overlooking some regions across the globe. This gap may leave unanswered the question of how South American countries’ regional trade linkages have changed amid the acceleration of globalization. This study, thus, investigates the regional linkages of global production sharing of South America by relying on value-added trade measures. Additionally, we develop a pioneering value-added hubness measure to illustrate the degree of relative market dependence between countries. The findings suggest that intra-regional forward linkages in South America have increased over time, but there are signs of a re-orientation towards Asia. China’s influence extended beyond Asia, and together with the United States, China became an important hub-nation for South America. Brazil appears as a potential regional hub, mainly through its domestic market and not domestic production. Therefore, the study adds to GVC literature with insights about a missing region, reveals signs of changes in the interconnections between regional blocs, and enriches the research on the hub-and-spoke trade systems.

Keywords: Global value chains; Regional linkages; Vertical specialization; Value-added trade; South America; Hubness Index (search for similar items in EconPapers)
JEL-codes: F14 F15 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1057/s41287-022-00572-8

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