Global Value Chains: A Framework for Analysis

Abstract

The paradigm of the world political economy has shifted dramatically over the past twenty years. Legal scholarship, however, lags significantly behind. Existing legal scholarship is calibrated to an outdated model that suggests that multinational corporations – either individually or through one-to-one supplier relationships – create, manufacture, and sell a given product. But in today’s world, in what have been termed “global value chains,” the research, design, production, and retail of most products take place through coordinated chain components that stretch systemically across multiple – from a few to a few thousand – firms. This reconfiguration of the global political economy poses challenges to conventional legal disciplinary boundaries, from Contract Law to Corporate Law to International Law as well as to, among others, Antitrust Law and Intellectual Property Law: none is able to explain or guide these complex new relationships inherent in contemporary global production.

This article is the first to integrate into U.S. legal scholarship the fundamental insights of the robust and multidisciplinary body of academic literature on global value chains. Through these insights, the article stakes new ground that is essential for advancing legal scholarship, including: (1) uncovering novel forms of legal relationships that are emerging between firms in global value chains; (2) showing how Contract Law and Corporate Law are necessarily mutually constitutive in global value chain systems; (3) revealing how the linkages – subject to different legal regimes – within global value chains have become the primary conduit for a multitude of commercially critical transfers, encompassing not only capital but also, importantly, knowledge and technology, including intellectual property; and (4) demonstrating the need to reframe existing legal debates which have remained focused on narrower questions regarding transnational corporate conduct and as such have been limited to determining, for instance, the types of rules that affect corporate behavior (e.g., public regulation versus private governance) or the most pertinent location of the relevant rule-maker and/or dispute-resolver (i.e., jurisdictional questions of domestic law versus international law).

Beginning with global value chains as the unit of analysis and drawing on each of the many applicable legal disciplines as appropriate, this article is seminal in setting forth the ongoing paradigm shifts taking place in the global political economy together with their relevant legal phenomena; at the same time, it is significant for opening opportunities for legal scholars to gauge and engage in normative interventions across multiple legal disciplines impacting both national and international law.

Keywords: Global Value Chains, Contract Law, Corporate Law, Commercial Law, International Law