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Cited by 42Global trade, sustainability, and social impactGlobal trade and economicsInternational Business and FDI

‘Governed’ trade: global value chains, firms, and the heterogeneity of trade in an era of fragmented production

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Dallas, Mark P.·2015·Review of International Political Economy
DOI 10.1080/09692290.2015.1018920
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Abstract

Over the past several decades, firms have de-verticalized and internationalized increasingly complex manufacturing and service functions, a phenomenon studied across the social sciences. However, the disciplines disagree over whether the fragmentation of production is substantively novel, requiring amendments to trade theory, or is simply a secular deepening of the international division of labor. Some economists view it as ‘just trade,’ driven by well-known actor-less determinants, such as factor endowments, technology, and returns to scale, while more recent firm heterogeneity trade theories consider firm behavior. By contrast, other heterodox social science approaches differ by focusing on the strategic actions of firms and sector-specific governance as independent drivers which ‘govern’ trade and determine the division of value between countries. This paper develops novel measurements by utilizing unique transactional trade data – the raw firm-level trade transactions that comprise standard inter-country trade statistics – on 439 of China's largest exporters in 18 subsectors of the electronics and light industries, to examine whether trade is heterogeneously governed in ways theorized by the global value chain (GVC) literature. It finds substantial empirical support for GVC-governed trade, and advances both GVC and firm-centric trade theory along several fronts.

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  • Considerable heterogeneity in control decisions exists among lead firms operating in the same geographic regions and industry sectors.

    “However, considerable heterogeneity in control decisions exists among lead firms operating in the same geographic regions and industry sectors, which suggests that firm-level strategic considerations, and not only macro-level forces, are powerful drivers of control patterns in GVCs (Dallas, 2015;Sako & Zylberberg, 2019).”

    From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Dallas, 2015

  • Firm-level strategic considerations, and not only macro-level forces, are powerful drivers of control patterns in GVCs.

    “However, considerable heterogeneity in control decisions exists among lead firms operating in the same geographic regions and industry sectors, which suggests that firm-level strategic considerations, and not only macro-level forces, are powerful drivers of control patterns in GVCs (Dallas, 2015;Sako & Zylberberg, 2019).”

    From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Dallas, 2015

  • Ways in which GVCs are organized vary not simply by lead firm size and productivity, but also by other heterogeneous firm level features, such as distinct governance channels available to lead firms.

    “While his analysis of transactional data of Chinese electronics/light industry firms uses size as a control, rather than independent, variable, he concludes that ways in which GVCs are organized vary not simply by lead firm size and productivity, but also by other heterogeneous firm level features, such as distinct governance channels available to lead firms.”

    From Global value chains: A review of the multi-disciplinary literature (2020) · cites this paper as Dallas, 2015

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Authors
Dallas, M. P.
Affiliations
Harvard University (US)
Corresponding author
Dallas, Mark P.
ORCID
Dallas, Mark P.
Venue
Review of International Political Economy
Publisher
Informa UK Limited
Published
2015-04-22
Volume
22
Issue
5
Pages
875-909
ISSN
  • 0969-2290 (ISSN-L)
  • 1466-4526
DOI
10.1080/09692290.2015.1018920
OpenAlex
W2007456794
Cited by
42
References
52
Citations by year
2026: 3 · 2025: 4 · 2024: 5 · 2023: 3 · 2022: 4 · 2021: 6 · 2020: 7 · 2019: 3 · 2018: 3 · 2017: 3 · 2016: 1
FWCI
6.54
Type
journal article
Language
en
Open access
Locations
  • Review of International Political Economy (publishedVersion)
  • SSRN Electronic Journal (acceptedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Business, Management and Accounting › Strategy and Management › Global trade, sustainability, and social impact
  • Social Sciences › Economics, Econometrics and Finance › General Economics, Econometrics and Finance › Global trade and economics
  • Social Sciences › Business, Management and Accounting › Strategy and Management › International Business and FDI
Keywords
global value chains, fragmented production, firm heterogeneity, trade governance, international division of labor, electronics industry, light industry, Chinese exporters, trade theory

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