Global Value Chains and Finance

Start date: 1 January 2022
End date: 31 August 2023
Principal investigator: Annina Kaltenbrunner
Co-investigators: Sandra Lancheros Torres
External co-investigators: Bruno Bonizzi, Senior Lecturer in Finance, University of Hertfordshire Business School; Jeff Powell, Senior Lecturer in Economics, University of Greenwich; Cornelia Staritz, Tenure Track Professor in Development Economics, University of Vienna
Postgraduate students: Felix Maile, PhD Candidate, Development Studies, University of Vienna

Description

Both the rise of global value chains (GVCs) and financialisation, that is the increased size and qualitative change of financial systems to more market-based forms, are key features of the global economy today. These processes have important economic implications and raise new policy questions, which have become increasingly visible in the Covid-19 crisis and pertinent through climate breakdown. These include, for example, questions about the resilience of and working conditions in GVCs, their development potential for the Global South, ecological limits of the current production and trade system, and issues of financial instability and the role of finance in the necessary socio-ecological transformation.

There are vibrant and interdisciplinary academic and policy discussions which analyse the rise of GVCs and financialisation. However, bar some important exceptions, these discussions have so far taken place in relative silos, neglecting the crucial interactions between those two global processes. The exceptions which exist have been applied to specific issues - , such as shareholder value and lead firm strategies (Palpacuer 2008; Milberg and Winkler 2013), limited access of finance by supplier firms (Whitfield et al. 2020), and financial engineering and tax evasion in the context of global wealth chains (GWCs) (Seabrooke and Wigan 2014; see also Coe et al. 2014) – and specific sectors (largely the commodity sector; e.g. Bargawi and Newman 2017; Staritz et al. 2018). So far there is no systematic and comprehensive analysis of - on the one hand - the role of finance and financialisation in shaping the nature, governance, resilience, and value distribution in GVCs across different sectors, - on the other hand - the implications that the proliferation and maintenance of GVC has for finance and financialisation processes both globally and domestically in countries of the global South.

This project aims to fill this gap by bringing together leading scholars in GVCs (Maile; Staritz) and financialisation (Bonizzi, Kaltenbrunner, Powell) in the Global South.

Impact

The main outcome of the project will be a critical engagement with the costs and benefits of integrating into global value chains (GVCs) and global production networks (GPNs) in the context of ongoing financialization processes within and beyond these chains/networks for countries of the Global South. This includes the identification of specific factors which shape the outcomes of such integration (e.g. the macroeconomic and regulatory framework; financial structures; business strategies) and specific measures to address them.