Who dominates global value chains? multinationals vs domestic firms

Yuning Gao, Bo Meng, Gabriele Suder and Jiabai Ye

No 825, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This paper aims to advance International Business (IB) research by better identifying the role and influential area of foreign-owned multinational enterprises (MNEs) in global value chains (GVCs) compared to that of domestic-owned firms. For doing this, we build an input-output model to divide th e topology of trade in value added into three networks composed respectively by the traditional trade, simple and complex GVC trade according to whether and how production sharing happens a cross national borders. Using the new OECD inter-country input-output data for 2000-2016, we find th at, China’s domestic-owned firms have been not only a supply center of manufacturing value added, but also rise as a new regional center of both supply and demand for services through simple GVC n etworks; the United States’ domestic-owned firms dominate GVCs in services as a global center for both demand and supply, especially in complex GVC networks; MNEs located in Germany and the U nited Kingdom show the dominate presence respectively in providing manufacturing and services v alue added via complex GVCs networks. Through making GVCs visible by trade in value added based network analyses with consideration of firm ownership, this paper helps better understanding of w ho dominates what types of GVC, thus enriches the IB research concerning the GVC governance.

Keywords: Global value chain; trade in value added; multinational enterprise; network analysis; input撲utput analysis; firm ownership (search for similar items in EconPapers)
JEL-codes: D57 F13 F15 F6 (search for similar items in EconPapers)
Date: 2021-09
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Published in IDE Discussion Paper = IDE Discussion Paper, No. 825. 2021-09

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