Countries’ positions in the international global value networks: Centrality and economic performance

Abstract

The international exchange of goods and services is increasingly organised along global value chains in which the various production stages are carried out at many different locations all over the world. A country can be seen as holding a central position in global trade to the extent that it is involved in a large number of economic transactions with alternative potential suppliers and has a wide access to different important markets. However, the centrality of countries’ positions in the international production of goods and services may vary according to the specific stages of the production process that countries occupy. Here we adopt a network-based perspective, and propose a novel three-faceted measure of centrality that captures countries’ distinct roles at the upstream, midstream, and downstream stages of the international production process. Findings suggest that rankings of countries based on our measures of centrality vary across production stages. While emerging and developing countries tend to secure central positions at upstream and midstream production stages, high-income countries tend to exert prevailing roles at downstream stages. Moreover, rankings based on our measures differ from alternative rankings obtained from traditional measures of market power simply reflecting aggregate trade values. This is especially the case within more traditional industries, such as Textiles and Apparel, in which small and less developed countries can play relevant roles at various stages of the production process.