Global value chains : inter-industry linkages, trade costs and policies

Abstract

The concept of the “global value chain” (GVC) has become popular as a description of the way that firms fragment production into various stages located in different economies. The result was characterized in 2010 by then Director-General of the WTO, Pascal Lamy, as products being “made in the world.”Footnote1 A basic feature of international production is that part—often much—of the value added that is embodied in a good is produced in many countries: Inputs that are sourced from all over the world are incorporated into a final product that in turn may be shipped all over the world.