When do value chains go global? A theory of the spatialization of global value chains

Abstract

Abstract In this article, I synthesize and extend the theoretical literature on global commodity chain (GCC) and global value chain (GVC) governance to generate a theory of the ‘globalness’ of value chains and the spatialization of value chain linkages. Drawing from the original GCC dichotomy of buyer/producer‐driven commodity chains, I emphasize the height of entry barriers to manufacturing and supplier capability differentials across the North–South divide as determinants of the amount and geographic extent of global offshoring behaviour. Using a novel empirical approach to the measurement of global offshoring behaviour at the global industry level, the article shows that the original GCC governance scheme successfully predicts the levels, rates and timing of global production fragmentation across three networked industries. Combining the original GCC governance scheme with the more recent GVC governance types, the theory leads to predictions about the specific types of GVC linkages that might occur given the drivenness of a chain and the geographical location of lead firms and their suppliers. I conclude by drawing out the theory's implications for our understanding of the link between value chain formation and economic development in the global South and suggesting areas for future research.

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