Panel Paper:
The Role of the State in Global Value Chains
*Names in bold indicate Presenter
We outline five major ways states affect value chains: 1) as a rule-setter for competition (i.e., the institutional foundation), which is consistent with the original insights in the global commodity/value chain theory; 2) as the formulator and executor of GVC-oriented industrial policy; 3) as a network facilitator, in which the state acts as a match-maker between domestic and foreign firms; 4) as a buyer of goods and services for government procurement, which changes the role of the state from taking a supportive role in the value chain to being a quasi-lead firm in a buyer-driven commodity chain; and 5) as an active participant in the creation and development of state-owned enterprises (SOEs). Thus, states take multiple roles in value chains, ranging from laissez-faire to activist approaches, which are determined by the political economy in which they reside. We explore these roles using case examples from our research and draw implications to GVC theory and analysis. We examine the network facilitation role of the state using the example of the South Korean animation industry from 1990-2011. The procurement role of the state is examined using the case of water infrastructure construction in the United States from 2009-2013. The SOE role of the state is exemplified by the steel industry in China from 2001-2013.
Full Paper: