IDEAS home Printed from https://ideas.repec.org/p/arx/papers/2103.01824.html
   My bibliography  Save this paper

Commentary on World Development Report 2020: Trading for Development in the Age of Global Value Chains

Author

Listed:
  • Rajkumar Byahut
  • Sourish Dutta
  • Chidambaran G. Iyer
  • Manikantha Nataraj

Abstract

The importance of trade to an economy needs no emphasis. You sell products or services that you are competitive at and buy those where you are not. Experience of countries such as South Korea and China demonstrate that resources required for development can be garnered through trade; thus, motivating many countries to embrace trade as a means for development. Simultaneously, emergence of 'Global Value Chain' or 'GVC' as they are popularly known has changed the way we trade. Though the concept of GVC was introduced in the early 2000s, there are examples of global value chains before the 1980s. However, the scale of the phenomenon and the way in which technological change, by lowering trade costs, has allowed fragmentation of production was not possible before (Hernandez et al., 2014). In this context, the World Bank has recently published its 'World Development Report 2020: Trading for Development in the Age of Global Value Chains' (WDR). The report prescribes that GVCs still offer developing countries a clear path to progress and that developing countries can achieve better outcomes by pursuing market-oriented reforms specific to their stage of development.

Suggested Citation

  • Rajkumar Byahut & Sourish Dutta & Chidambaran G. Iyer & Manikantha Nataraj, 2021. "Commentary on World Development Report 2020: Trading for Development in the Age of Global Value Chains," Papers 2103.01824, arXiv.org.
    • Handle: RePEc:arx:papers:2103.01824
    as

    Download full text from publisher

    File URL: http://arxiv.org/pdf/2103.01824
    File Function: Latest version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Robert C. Johnson & Guillermo Noguera, 2017. "A Portrait of Trade in Value-Added over Four Decades," The Review of Economics and Statistics, MIT Press, vol. 99(5), pages 896-911, December.
    2. Andrei A. Levchenko, 2007. "Institutional Quality and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(3), pages 791-819.
    3. Ponte, Stefano & Kelling, Ingrid & Jespersen, Karen Sau & Kruijssen, Froukje, 2014. "The Blue Revolution in Asia: Upgrading and Governance in Aquaculture Value Chains," World Development, Elsevier, vol. 64(C), pages 52-64.
    4. Richard Baldwin & Javier Lopez-Gonzalez, 2015. "Supply-chain Trade: A Portrait of Global Patterns and Several Testable Hypotheses," The World Economy, Wiley Blackwell, vol. 38(11), pages 1682-1721, November.
    5. Cristina Constantinescu & Aaditya Mattoo & Michele Ruta, 2020. "The Global Trade Slowdown: Cyclical or Structural?," The World Bank Economic Review, World Bank, vol. 34(1), pages 121-142.
    6. Arvind Subramanian, 2007. "The evolution of institutions in India and its relationship with economic growth," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 23(2), pages 196-220, Summer.
    7. Christ, Nannette & Ferrantino, Michael J., 2011. "Land Transport for Export: The Effects of Cost, Time, and Uncertainty in Sub-Saharan Africa," World Development, Elsevier, vol. 39(10), pages 1749-1759.
    8. Meagher, Kate, 2019. "Working in chains: African informal workers and global value chains," LSE Research Online Documents on Economics 91590, London School of Economics and Political Science, LSE Library.
    9. Alessandro Borin & Michele Mancini, 2019. "Measuring What Matters in Global Value Chains and Value-Added Trade," World Bank Publications - Reports 31533, The World Bank Group.
    10. Lee G. Branstetter & Britta Glennon & J. Bradford Jensen, 2019. "The IT Revolution and the Globalization of R&D," Innovation Policy and the Economy, University of Chicago Press, vol. 19(1), pages 1-37.
    11. Sanjay Kathuria, 2018. "A Glass Half Full," World Bank Publications - Books, The World Bank Group, number 30246, December.
    12. Jones, Ronald & Kierzkowski, Henryk & Lurong, Chen, 2005. "What does evidence tell us about fragmentation and outsourcing?," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 305-316.
    13. Jean-François Arvis & Gaël Raballand & Jean-François Marteau, 2010. "The Cost of Being Landlocked : Logistics Costs and Supply Chain Reliability," World Bank Publications - Books, The World Bank Group, number 2489, December.
    14. Hiau Looi Kee & Heiwai Tang, 2016. "Domestic Value Added in Exports: Theory and Firm Evidence from China," American Economic Review, American Economic Association, vol. 106(6), pages 1402-1436, June.
    15. Alonso de Gortari, 2019. "Disentangling Global Value Chains," NBER Working Papers 25868, National Bureau of Economic Research, Inc.
    16. -, 2014. "Global value chains and world trade: Prospects and challenges for Latin America," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37041 edited by Eclac.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bernardina Algieri & Antonio Aquino & Marianna Succurro, 2022. "Trade Specialisation and Changing Patterns of Comparative Advantages in Manufactured Goods," Italian Economic Journal: A Continuation of Rivista Italiana degli Economisti and Giornale degli Economisti, Springer;Società Italiana degli Economisti (Italian Economic Association), vol. 8(3), pages 607-667, November.
    2. Marcel P. Timmer & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2021. "Supply Chain Fragmentation and the Global Trade Elasticity: A New Accounting Framework," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 69(4), pages 656-680, December.
    3. Bown, Chad P. & Erbahar, Aksel & Zanardi, Maurizio, 2021. "Global value chains and the removal of trade protection," European Economic Review, Elsevier, vol. 140(C).
    4. Stefan Pahl & Marcel P. Timmer, 2020. "Do Global Value Chains Enhance Economic Upgrading? A Long View," Journal of Development Studies, Taylor & Francis Journals, vol. 56(9), pages 1683-1705, July.
    5. Michael Sposi & Kei-Mu Yi & Jing Zhang, 2021. "Trade Integration, Global Value Chains, and Capital Accumulation," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 69(3), pages 505-539, September.
    6. Abdulkareem Alhassan & Joshua Dzankar Zoaka & Salim Hamza Ringim, 2021. "Africa as headwaiter at the dining table of global value chains: Do institutions matter for her participation?," African Development Review, African Development Bank, vol. 33(3), pages 560-576, September.
    7. Bhushan Praveen Jangam & Badri Narayan Rath, 2020. "Cross-country convergence in global value chains: Evidence from club convergence analysis," International Economics, CEPII research center, issue 163, pages 134-146.
    8. Aichele, Rahel & Heiland, Inga, 2018. "Where is the value added? Trade liberalization and production networks," Journal of International Economics, Elsevier, vol. 115(C), pages 130-144.
    9. Nenci, Silvia & Fusacchia, Ilaria & Giunta, Anna & Montalbano, Pierluigi & Pietrobelli, Carlo, 2022. "Mapping global value chain participation and positioning in agriculture and food: stylised facts, empirical evidence and critical issues," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 11(2), July.
    10. Fally, Thibault & Hillberry, Russell, 2018. "A Coasian model of international production chains," Journal of International Economics, Elsevier, vol. 114(C), pages 299-315.
    11. Marcel P Timmer & Sébastien Miroudot & Gaaitzen J de Vries, 2019. "Functional specialisation in trade," Journal of Economic Geography, Oxford University Press, vol. 19(1), pages 1-30.
    12. Pol Antràs & Davin Chor, 2021. "Global Value Chains," NBER Working Papers 28549, National Bureau of Economic Research, Inc.
    13. Rubínová, Stela & Sebti, Mehdi, 2021. "The WTO Global Trade Costs Index and its determinants," WTO Staff Working Papers ERSD-2021-6, World Trade Organization (WTO), Economic Research and Statistics Division.
    14. Dutta, Sourish, 2020. "Measurement of Global Value Chain (GVC) Participation in World Development Report 2020," MPRA Paper 105222, University Library of Munich, Germany, revised 09 Jan 2021.
    15. Stefan Pahl & Marcel P. Timmer, 2019. "Patterns of vertical specialisation in trade: long-run evidence for 91 countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 155(3), pages 459-486, August.
    16. Simola, Heli, 2021. "The impact of Covid-19 on global value chains," BOFIT Policy Briefs 2/2021, Bank of Finland Institute for Emerging Economies (BOFIT).
    17. Ayako Obashi, 2022. "Overview of Foreign Direct Investment, Trade, and Global Value Chains in East Asia," Working Papers DP-2021-50, Economic Research Institute for ASEAN and East Asia (ERIA).
    18. Ping Hua, 2021. "How did China's GVCs participation influence its manufacturing productivity?," Working Papers hal-03505687, HAL.
    19. Biyik, Onur, 2022. "Double Counting in Mystery: Journey of Intermediate Products in Multi-Country Trade," Conference papers 333417, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    20. repec:gdk:wpaper:51 is not listed on IDEAS
    21. Liu, Chen & Ma, Xiao, 2018. "China's Export Surge and the New Margins of Trade," MPRA Paper 103970, University Library of Munich, Germany, revised Oct 2020.

    More about this item

    JEL classification:

    • F0 - International Economics - - General
    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:arx:papers:2103.01824. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: arXiv administrators (email available below). General contact details of provider: http://arxiv.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.