How to Decompose Production Chain and Utilize It to Unveil GVC Connections Among Countries

Abstract

This paper aims to contribute to the literature by developing a calculation method which can be used to explore GVC connections among countries. The present work introduces International Production Stage Length as an indicator of a country's involvement into the global production. The developed calculation method is employed to test GVC connections between China, USA, Germany, and their neighboring countries. The empirical study confirms a higher level of production sharing among countries which belong to the same region which indicates the existence of several regional value chains rather than a one global value chain.