Global Value Chain Policy Series Introduction

The document defines global value chains (GVCs) as the international distribution of activities required to bring a product from conception to end use, noting they comprise 60%-67% of global trade in value-added terms. It argues that GVCs offer developing countries an alternative route to industrialization by allowing specialization in specific tasks rather than entire industries, though least-developed countries (LDCs) remain significantly underrepresented in world exports. The text highlights the role of multinational enterprises (MNEs) as lead firms that set private standards affecting environmental and social outcomes, while noting that GVCs can exacerbate tax avoidance and structural unemployment. The introduction outlines five subsequent papers in the series focusing on environment, investment, services, competition, and taxation to promote a coherent policy framework for sustainable and inclusive growth.

• Global value chains (GVCs) are a dominant feature of international trade, estimated to account for 60%-67% of global trade when measured in value-added terms.
• GVCs provide a different path to economic development compared to traditional industrialization, enabling developing nations to specialize in specific tasks and integrate into international networks instead of building entire domestic industries.
• Despite the opportunities of GVCs, least-developed countries (LDCs) have very low participation rates, with their shares in world exports of merchandise and commercial services being only 0.94% and 0.7% respectively in 2016.
• Multinational enterprises (MNEs) act as lead firms in GVCs and can drive sustainability by setting private standards for their suppliers regarding CO2 emissions and working conditions.
• GVCs can negatively impact inclusiveness by facilitating tax avoidance by MNEs and increasing tax competition between jurisdictions seeking foreign direct investment (FDI).
• Small and medium-sized enterprises (SMEs) face specific barriers to GVC participation, including difficulties in accessing trade and supply chain finance, meeting private standards, and importing inputs.
• Traditional trade policies that protect specific domestic industries can be counterproductive in a GVC context, as they may disrupt other firms within the same value chain and reduce overall competitiveness.

APA

Doherty, S., & Verghese, A. (2018). Global Value Chain Policy Series Introduction. World Economic Forum. http://www3.weforum.org/docs/WP_Global_Value_Chain_Policy_Series_Introduction_report_2018.pdf

Chicago

Doherty, Sean, and Aditi Verghese. Global Value Chain Policy Series Introduction. World Economic Forum, 2018. http://www3.weforum.org/docs/WP_Global_Value_Chain_Policy_Series_Introduction_report_2018.pdf.

Wikipedia

{{cite report |last1=Doherty |first1=Sean |last2=Verghese |first2=Aditi |title=Global Value Chain Policy Series Introduction |publisher=World Economic Forum |date=June 2018 |url=http://www3.weforum.org/docs/WP_Global_Value_Chain_Policy_Series_Introduction_report_2018.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{doherty2018global, author = {Doherty, Sean and Verghese, Aditi}, title = {{Global Value Chain Policy Series Introduction}}, institution = {World Economic Forum}, year = {2018}, month = jun, url = {http://www3.weforum.org/docs/WP_Global_Value_Chain_Policy_Series_Introduction_report_2018.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }