The Multinational Enterprise in Global Production and Trade Networks - Individual Essay

As the growth of international production and exchange extended further, we started seeing the unbundling of the MNC as a single coherent and discrete entity with clear boundaries. The GVC literature developed a concept of value chains that was first floated by Michael Porter in his Competitive Advantage work.

The GVC approach was developed around a question about whether an unequal relationship existed between where value was being created and where it was captured. In value chains there may be places where exchange is unequal where, for instance, a grower of coffee may get less than the value created when selling to a merchant, or paying debts from a finance company.

Given that GVC began with a special focus on industries in developing countries, it is perhaps no surprise that the approach is associated with the Institute of Development Studies (IDS) at Sussex University, and has been picked up by international policy institutions like the International Labour Organisation.

GVC decentres the analysis of IB on companies and what companies do themselves. GVC is instead interested in relations of power and control up and down industries. These relations are recast not in terms of ownership but in terms of governance, and there are several forms of governance developed here.

GVC also offers policy action and especially through notions of economic and social upgrading.

https://www.oecd.org/industry/ind/global-value-chains.htm

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History of “Global Value Chain” (GVC)

“Global commodity chain” (Gereffi)

“Value chain” (Porter)

GVCs are industrial patterns where production of single goods occurs in multiple countries and is done by multiple firms/actors.

A product of “fine slicing” of activities towards new locations and suppliers

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