Testing the Smile Curve: Functional Specialisation and Value Creation in GVCs

Roman Stöllinger*

*Korrespondierende*r Autor*in für diese Arbeit

Publikation: Wissenschaftliche FachzeitschriftOriginalbeitrag in FachzeitschriftBegutachtung

Abstract

This paper addresses the ‘smile curve hypothesis’ which suggests that the potential for generating value added varies significantly across the value chain with the production stage being the least promising segment. Based on granular greenfield FDI data a metric is developed that allows capturing the functional specialisation of countries in global value chains at the industry level. The measure not only provides new insights into the specialisation of countries as ‘factory economies’ or ‘headquarter economies’ but is also used to test and confirm econometrically the smile curve hypothesis by showing that countries specialised in the production stage of the value chains tend to generate less value added per unit of output produced than those specialised as headquarter economies.

OriginalspracheEnglisch
Seiten (von - bis)93-116
Seitenumfang24
FachzeitschriftStructural Change and Economic Dynamics
Jahrgang56
DOIs
PublikationsstatusVeröffentlicht - März 2021
Extern publiziertJa

Bibliographische Notiz

Funding Information:
Research for this paper was financed by the Anniversary Fund of Oesterreichische Nationalbank (OeNB) (grant N°17665). The author would like to thank Robert Stehrer (wiiw) for very insightful discussions and suggestions. I am also grateful to the participants of the 4th Mainz Workshop on FDI and Multinational Firms and the 4th SVOC Conference, Budapest for valuable suggestions and comments. Inputs received from UNIDO staff at the occasion of UNIDO's PRS seminar series in June 2019 is highly appreciated as well. The author is particularly indebted to Alexandra Bykova and David Zenz for very valuable research assistance.

Funding Information:
Research for this paper was financed by the Anniversary Fund of Oesterreichische Nationalbank (OeNB) (grant N°17665). The author would like to thank Robert Stehrer (wiiw) for very insightful discussions and suggestions. I am also grateful to the participants of the 4th Mainz Workshop on FDI and Multinational Firms and the 4 th SVOC Conference, Budapest for valuable suggestions and comments. Inputs received from UNIDO staff at the occasion of UNIDO's PRS seminar series in June 2019 is highly appreciated as well. The author is particularly indebted to Alexandra Bykova and David Zenz for very valuable research assistance.

Publisher Copyright:
© 2020 Elsevier B.V.

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