Firms in Global Production Networks: Participation, Opportunities and Trade Barriers

Abstract

The fragmentation of production and the international outsourcing of tasks have led to the emergence of complex and borderless production systems named global value chains (GVCs). Recent theoretical works have shown that countries can profit from participation in GVCs through multiple channels. Given the relevance of this phenomenon, GVCs are becoming increasingly influential in shaping trade and FDI patterns as well as upgrading opportunities. In such integrated framework, the effects of tariff and non-tariff barriers can be more harmful than in traditional contexts. Therefore, when adopting trade policies decisions, governments and policy makers should consider the opportunities that countries and firms can take from their involvement in GVCs. If in the past the primary role in these global networks was assigned to large and vertically integrated companies, recent developments have highlighted the international success of a class of small and medium sized entities (SMEs) with a district base. Hence, current research is focusing more on strategic choices at the individual firm level as they are now considered a key node for expanding in foreign markets. The purpose of this dissertation is thus to provide an appropriate understanding of the GVC model by integrating the reference literature with the experience of three local companies involved in GVCs and through an empirical analysis aimed at assessing trade barriers in countries’ micro dynamics of exports.