Global models of networked organization, the positional power of nations and economic development

Matthew C. Mahutga

Review of International Political Economy, 2014, vol. 21, issue 1, 157-194

Abstract: Interdisciplinary literature on global commodity chains (GCCs)/global value chains (GVCs) and global production networks (GPNs) contends that inter-firm power differentials within globally networked forms of economic organization have implications for the developmental trajectories of nation-states. In this article, I advance these literatures in three ways. First, I bridge the two approaches by elaborating an exchange-theoretic conceptualization of inter-firm power that is latent in the two literatures. This conceptualization focuses narrowly on the determinants of inter-firm power asymmetries and is useful for explaining why actual production networks vary in terms of the relative power of buyers and producers. Second, I develop an empirical framework to advance basic research on the link between globally networked forms of economic organization and national economic development. In particular, I derive cross-nationally and temporally comparable country-level measurements of the average bargaining power of a country's resident firms using industry-specific international exchange (trade) networks. I demonstrate the validity of these indices through a historical analysis of trade networks in the transport equipment and garment industries and by analysing cross-national variations in wages in the two industries. Finally, I conclude by charting a parallel path for GCC/GVC and GPN research that implicates global models of network organization in macro-comparative analyses of economic development.

Date: 2014
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DOI: 10.1080/09692290.2013.779932

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