Does the sticky relationships of global value chains help stabilize employment? Evidence from China

Youfu Yue, Junjun Hou, Meichen Zhang and Jiabai Ye

Structural Change and Economic Dynamics, 2024, vol. 69, issue C, 632-651

Abstract: Global production beyond borders is becoming an invisible force for stabilizing employment, and the behaviour of firms featuring transnational corporations has become critical to the development of production. In this paper, we construct a systematic quantitative analytical framework of measuring global value chain (GVC) sticky relationships and analyze the steady growth of employment from the perspective of inter-firm interactions firstly, furthermore, provide the latest evidence from China. Our findings show that: multiple interactions between firms for that participate GVC contribute to the development of the GVC sticky relationships and promotion of employment growth, the GVC sticky relationship accounts for approximately 17.32 % of the total employment in China, and domestic GVC sticky relationship activities have become an important force in stabilizing and promoting employment growth in China, it surpasses cross-border GVC employment since 2008. Furthermore, we characterize the shape of GVC sticky relationships and find that the circle-structure relationship effect has greater potential to stabilize employment in China, particularly in the sectors of ICT, wholesale and retailor. Therefore, mitigating the transaction costs of participating in GVC by reducing institutional barriers in the process of firms' interactions is significant for maintaining the employment stability.

Keywords: Global value chain; Sticky relationships; Employment stability; Structural decomposition analysis (search for similar items in EconPapers)
JEL-codes: F23 J21 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:69:y:2024:i:c:p:632-651

DOI: 10.1016/j.strueco.2024.04.006

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