Skills and Activity Upgrading in Global Value Chains: Trends and Drivers for Asia

31 Pages Posted: 20 Oct 2016

See all articles by Gaaitzen J. De Vries

Gaaitzen J. De Vries

University of Groningen

Quanrun Chen

University of International Business and Economics (UIBE)

Rana Hasan

Asian Development Bank; University of Maryland - Department of Economics

Zhigang Li

Asian Development Bank

Date Written: August 30, 2016

Abstract

This paper examines the trends in skill and activity upgrading in global value chains (GVCs) and the drivers of upgrading in Asian economies. It uses the newly constructed ADB Multi-Region Input-Output Tables as well as occupation data on jobs by educational attainment and business activities, namely research and development; production; logistics, sales, and marketing; administration and back-office; and headquarter activities. Our results suggest an ongoing specialization process in high-income Asian countries and in developing member countries (DMCs) toward high-skilled knowledge-intensive activities. The pace of upgrading differs across Asian countries, being more rapid and encompassing in the People’s Republic of China in comparison to other DMCs. We use a structural decomposition method to account for the drivers of the trends observed. In particular, technological change in GVCs that is biased toward knowledge-intensive activities is important in accounting for the trends observed.

Keywords: functional upgrading, global multiregional input–output model, global supply chains, structural decomposition analysis, World Input-Output Database

JEL Classification: D57, F16, F63

Suggested Citation

De Vries, Gaaitzen J. and Chen, Quanrun and Hasan, Rana and Li, Zhigang, Skills and Activity Upgrading in Global Value Chains: Trends and Drivers for Asia (August 30, 2016). Asian Development Bank Economics Working Paper Series No. 496. Available at SSRN: https://ssrn.com/abstract=2856290 or http://dx.doi.org/10.2139/ssrn.2856290

Gaaitzen J. De Vries (Contact Author)

University of Groningen

Quanrun Chen

University of International Business and Economics (UIBE) ( email )

10, Huixin Dongjie
Changyang District
Beijing, Beijing 100029
China

Rana Hasan

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

University of Maryland - Department of Economics ( email )

College Park, MD 20742
United States
808-944-7590 (Phone)
808-944-7399 (Fax)

Zhigang Li

Asian Development Bank ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

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