Measuring Structural Power in Global Value Chains: Evidence from Malaysian Manufacturing

Miao Zhang (), Rui Yang (), Rajah Rasiah and Mingzhang Jiang ()
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Miao Zhang: Center for Southeast Asian Studies, Xiamen University
Rui Yang: Center for Southeast Asian Studies, Xiamen University
Mingzhang Jiang: School of Economics, Xiamen University

Malaysian Journal of Economic Studies, 2024, vol. 61, issue 1, 51-77

Abstract: The global value chain (GVC), as the most important feature and driving force of globalisation has profoundly shaped state–market relations, as well as the international political economy. This paper uses Malaysia as a case study to demonstrate a country’s embedding structural power in GVC. Deploying the OECD’s Inter-Country Input-Output Table from 1995 to 2018, two indicators were constructed, namely power of value added (PV) and interaction of value added (IV), to measure Malaysia’s structural power in GVC. The results indicate that Malaysia’s PV in GVCs has declined over the years. A combination of high GVC participation but low GVC position indicates that Malaysia’s export sector remains stuck in low value-added activities despite being highly integrated into global production networks. Also examined is the value-added interaction between Malaysia and major economic powers, such as the US, China and Japan. In so doing, we provide an evolutionary explanation of Malaysia’s location in the international political economic system where economic and political power are increasingly intertwined.

Keywords: Global value chain; trade in value added; structural power; Malaysia (search for similar items in EconPapers)
JEL-codes: L60 L63 N45 N65 O14 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:mjr:journl:v:61:y:2024:i:1:p:51-77

DOI: 10.22452/MJES.vol61no1.4

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