Positioning on the Global Value Chain Map: Where Do You Want to Be?

This article aims to understand which policy disciplines are associated with the positioning of countries in the Global Value Chain (GVC). In today’s world production and trade takes place among multiple stages of a supply chain stretching many country participants around the world. This induces countries to specialize in a so-called ‘slice’ of the GVC which can be at the beginning (upstream), middle or end (downstream) of the chain. Yet, it is unclear how countries and industries specialize along these slices, and what type of policies are determining where countries and industries are placed on the GVC map. Hence, this paper first makes an attempt to examine where countries along the various GVC dimensions are positioned regarding production and trade based on recently developed measures. In a second step, it investigates what type of policies are significantly linked to the GVC position of these countries by including a battery of various policy disciplines in the analysis. This paper finds that depending on where countries specialize, many domestic economic policy barriers are correlated with a country’s position on the GVC map. It therefore states that trade nowadays is interconnected with many other policy fields beyond traditional trade disciplines. Finally, the findings of this paper are applied to specific industries by developing three case studies.