Measurement of Global Value Chain (GVC) Participation in World Development Report 2020

TL;DR

The paper discusses the challenges and methods of measuring participation in global value chains, emphasizing technological changes and the complexity of modern international trade involving multiple cross-border flows.

Contribution

It provides an overview of GVC participation measurement methods and addresses the conceptual challenges posed by modern fragmented production processes.

Findings

GVCs involve complex, multi-border flows of goods and services.

Technological advancements facilitate production fragmentation.

Measurement of GVC participation requires new conceptual frameworks.

Abstract

As we can understand with the spread of GVCs, a lot of new questions emerge regarding the measurement of participation and positioning in the globalised production process. The World Development Report (WDR) 2020 explains the GVC phenomenon and then focus on participation and the prospects especially in a world of change in technology. From the overview section, we can figure out that nowadays, goods and services flow across borders as intermediate inputs rather than final goods. In traditional trade, we need two countries with the notions of export and import. However, in GVC trade, the goods and services cross borders multiple times requiring more than two countries. Remarkable improvements in information, communication, and transport technologies have made it possible to fragment production across national boundaries. So the question is: how to conceptualise this type of new trade to justify the measurement of participation.