What Are the Implications for Global Value Chains When the Market Shifts from the North to the South?

Rapid growth in many low-income economies was fuelled by the insertion of producers into global value chains feeding into high-income northern markets. This paper charts the evolution of financial and economic crisis in the global economy and argue...

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Bibliographic Details
Main Authors:	Kaplinsky, Raphael, Farooki, Masuma
Format:	Policy Research Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ADVANCED ECONOMIES AGRICULTURE BARRIERS TO ENTRY BRAND BUYING POWER CHILD LABOR CHILD LABOR STANDARDS CLIMATE COAL COMMODITIES COMMODITY COMMODITY PRICES COMPARATIVE ADVANTAGE COMPETITIVE ADVANTAGE CONSUMER DEMAND CONSUMER SPENDING CONSUMERS CONSUMPTION RATES CURRENT ACCOUNT BALANCE DEBT DEFICIT SPENDING DEFLATION DEMAND FOR ENERGY DEMAND GROWTH DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY DEVELOPMENT STRATEGY DISPOSABLE INCOME DIVISION OF LABOR DOMESTIC MARKETS DOMESTIC PRODUCTION DRIVERS ECONOMIC ACTIVITY ECONOMIC CRISIS ECONOMIC GROWTH ECONOMIC OUTLOOK ECONOMIC RESEARCH ECONOMIC STRUCTURES ECONOMIC THEORY ELASTICITY EMERGING ECONOMIES ENERGY CONSUMPTION ENERGY INTENSITY ENVIRONMENTAL EXTERNALITIES ENVIRONMENTAL IMPACT ENVIRONMENTAL STANDARDS EXCHANGE RATES EXPENDITURE EXPENDITURES EXPORTS EXTERNAL TRADE EXTERNALITIES FAIR FINANCIAL CRISIS FINANCIAL SECTOR FISCAL DEFICITS FIXED ASSETS FIXED INVESTMENTS FOREIGN EXCHANGE GDP GENERAL EQUILIBRIUM GLOBAL ECONOMIC PROSPECTS GLOBAL ECONOMICS GLOBAL ECONOMIES GLOBAL ECONOMY GLOBAL MARKETS GLOBAL OUTPUT GLOBALIZATION GOVERNMENT BUDGETS GOVERNMENT DEBT GOVERNMENT DEFICIT GROSS NATIONAL SAVINGS GROWTH IN DEMAND GROWTH MODELS GROWTH RATES GROWTH THEORY HIGH WAGES HOUSEHOLD CONSUMPTION IMPORTS INCOME INCOME ELASTICITY OF DEMAND INCOME LEVELS INDUSTRIALIZATION INFLATION INFRASTRUCTURE INVESTMENTS INNOVATION INTERMEDIATE GOODS INTERMEDIATE PRODUCTS INTERNATIONAL TRADE LABOR COSTS LABOR FORCE LABOR STANDARDS LOW-INCOME COUNTRIES LOW-INCOME COUNTRY LOW-INCOME ECONOMIES LOW-INCOME ECONOMY MARKET SEGMENTS MARKETING MULTIPLIER EFFECTS MULTIPLIERS NATURAL RESOURCES NET EXPORTS PER CAPITA CONSUMPTION PER CAPITA INCOME PER CAPITA INCOMES POLICY ANALYSIS POLICY MAKERS POLICY RESPONSE POLITICAL STABILITY POLLUTION POPULATION AGEING PRODUCT DIFFERENTIATION PRODUCT MARKETS PRODUCT QUALITY PRODUCTION FUNCTION PRODUCTIVITY PRODUCTIVITY GROWTH RAPID ECONOMIC GROWTH RAPID GROWTH RENTS RETAIL SAFETY SAFETY STANDARDS SALE SAVINGS SCENARIOS SECURITIES SMALL COUNTRY SPREAD SUPPLIERS SUPPLY CHAIN SUPPLY CHAIN MANAGEMENT SUPPLY FUNCTION SURPLUS SURPLUSES TAX THIRD WORLD TOTAL CONSUMPTION TRADE DEFICITS UNCERTAINTIES UNEMPLOYMENT URBANIZATION VALUE ADDED WAGES WEAK ENFORCEMENT WEALTH WORKING CONDITIONS WORLD DEVELOPMENT INDICATORS
Online Access:	http://documents.worldbank.org/curated/en/2010/02/11777036/implications-global-value-chains-market-shifts-north-south http://hdl.handle.net/10986/19923

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Summary:	Rapid growth in many low-income economies was fuelled by the insertion of producers into global value chains feeding into high-income northern markets. This paper charts the evolution of financial and economic crisis in the global economy and argues that the likely outcome will be sustained growth in the two very large Asian Driver economies of China and India and stagnation in the historically dominant northern economies. Given the nature of demand in low-income southern economies, it is likely to be reflected in sustained demand for commodities, with other southern economy producers in global value chains being forced into lower levels of value added. Standards are likely to be of considerably reduced significance in value chains feeding into China and India.

What Are the Implications for Global Value Chains When the Market Shifts from the North to the South?

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