FY 2016/2017 Research Topic: B-1-07
Labor in the Global Value Chain
It is widely believed that entry into the global value chain (GVC) is an important growth strategy in policy arenas in both developed and developing countries. However, several concerns have also been argued. First, only a portion of firms can participate in GVCs. In particular, indigenous firms in developing countries face difficulty in starting business relationships with local affiliates of multinational enterprises (MNEs). Second, developing countries with abundant labor can arguably become trapped in labor-intensive and low value-added tasks in the GVC, making it difficult to upgrade their industries. Third, competitive pressure in GVSs may induce countries to lower labor standards and/or labor protections in order to maintain their export competitiveness and attract foreign direct investment. These concerns regarding GVCs may or may not be materialized. Considering the pros and cons of GVCs, this research project theoretically and empirically examines the following research agenda: (i) facing opportunities of GVC participation, how do firms alter their human resource management practices? Are there “good” management practices for successful GVC participation? If such management practices exist, why do not all firms apply them? (ii) Work values are important elements of human capital. How do people's work values affect the degree of GVC participation? Alternatively, does GVC participation change people’s work values? (iii) Do GVCs cause a race to the bottom in labor standards and/or labor protections? How can the role of labor clauses in trade agreements be interpreted? Based on such an agenda, this project aims to obtain new insights into labor in GVCs and the policy implications for economic growth.
April 2016 - March 2018
Members of the Research Project
- First year: Interim Report
- Second year: IDE Research Bulletin