Institute of Economics, Scuola Superiore Sant'Anna
Abstract
Power is a key component in understanding and analyzing global production and the
governance structures of Global Value Chains. In this paper, we propose a novel
analytical link between the power dynamics in GVCs and the network configuration
of their respective production topology. Our proposed link is based on the notion of
positional power according to which power is associated with the centrality of a sector
with regards to the production process, the sector belongs to. Using global input-output
data, we show that the network structure of global production is associated with the
global distribution of profits among national economic sectors and, consequently,
influences the power relations and thus the governance structures of supply networks.
More specifically, we find a high correlation between the distribution of profits and a
sector’s position in global production, captured by its total strength centrality. Based
on this, we provide a quantitative measure of positional power within global production
and its governance structures
