Growth and distribution regimes under global value chains: Diversification, integration, and uneven development

Arpan Ganguly*, Danilo Spinola

*Corresponding author for this work

    Research output: Contribution to journalArticlepeer-review

    Abstract

    This study investigates the macroeconomic interactions between productive structure and income distribution in the context of Global Value Chains (GVC). Our research goes beyond the traditional scope by presenting a detailed typology that examines how globalisation has amplified uneven development processes on a global scale. This in-depth exploration provides valuable insights into the intricate interplay between global economic integration and regional development disparities, thereby contributing to the broader understanding of growth and distribution in the context of globalisation. We propose a theoretical framework inspired by the Structuralist literature to identify three distinct regimes in globalised production chains: (1) a structure/diversification regime based on the Balance of Payments Constrained Model (BPCM) literature, (2) an integration regime derived from the GVC literature, and (3) a functional income distribution regime in open economies. We use Principal Component Analysis (PCA) scores to create indices (proxies) for each regime to then identify country patterns within a structured typology. We then analyse growth trajectories and estimate the causal relationship between these regimes and per-capita growth using multiple regression models ? fixed effects (FE), instrumental variables (IV), and generalised method of moments (GMM). Our dataset includes data from 60 countries between 1995-2018, sourced from the World Development Indicators (WDI), World Input-Output Database (WIOD), Trade in Value Added (TiVA), and the Penn World Tables (PWT). This study significantly enhances the understanding of structuralist growth models by offering a comprehensive and unified narrative on the variety of economic growth regimes within Global Value Chains (GVCs).
    Original languageEnglish
    Pages (from-to)634-649
    Number of pages16
    JournalStructural Change and Economic Dynamics
    Volume70
    DOIs
    Publication statusPublished (VoR) - 16 May 2024

    Keywords

    • Global Value Chains
    • Economic Growth
    • Uneven Development
    • Income Distribution

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