Global Value Chains
Chain of activities for a firm operating in a specific industry
Products pass through all activities in chain in order
At each activity, the product gains more and more value.
Chain of activities gives the product more value than the sum of the independent
Requires investment in information technology, changes in organizational processes,
committed leadership, flexible jobs, adaptable employees.
Export Processing Zones (EPZs)
Area where tariffs and quotas are eliminated and bureaucratic requirements are lowered
in hopes of attracting foreign investments
Producer- Driven vs. Buyer-Driven Commodity Chains
Global Commodity Chain
A network or complex of networks, or process that result in a finished
Link labor, production, households, states, and enterprises to each other within a global
Integrate transnational labor processes and corporations involved in global sourcing and
global marketing of products.
Input-output structure, territoriality, governance structure. Length, depth, density.
Challenges idea that capitalism is a process contained within nation-states by tracking the
organizational, geographical, and cultural dimensions of world-wide chains for the
manufacture and distribution of goods
Producer driven GCC
Large usually transnational manufacturers play the central roles in coordinating
Characteristic of intensive industries like automobiles, aircraft, computers,
semiconductors, heavy machinery.
Spread is transnational, but number of countries in commodity chain and their levels of
development are varied.
Buyer driven GCC
Industries in which large retailers, marketers, and branded manufacturers play the pivotal
roles in setting up decentralized production networks in a variety of exporting countries
typically located in the third world