Innovation, Global Value Chains, and Globalization Measurement

In recent decades, production processes of intermediate and final products have been increasingly fragmented across countries in what are called global value chains (GVCs). GVCs may involve companies in one country outsourcing stages of production to unrelated entities in other countries, multinational enterprises (MNEs) offshoring stages of production to units of the MNE overseas, or both. GVCs can also involve completely independent companies merely sourcing their parts from whichever upstream company may be the most competitive, with no control arrangement necessarily involved. The changing global trade environment and the changes in firms' behavior have raised new and more complicated issues for policy makers and have made it difficult for them to understand the extent and operations of GVCs and their spillover effects on national and local economies. To improve the understanding, measurement, and valuation of GVCs, the Innovation Policy Forum at the National Academies of Sciences, Engineering, and Medicine convened a workshop, "Innovation, Global Value Chains, and Globalization Measurement" May 5-7, 2021. This proceedings has been prepared by the workshop rapporteurs as a factual summary of what occurred at the workshop. Table of Contents Front Matter 1 Introduction 2 Multinational Firms and Global Innovation 3 Tracing Value Added in the Presence of Multinational Firms with an Application to High-Tech Sectors 4 Trade in Services, Intangible Capital, and the Profit-Shifting Hypothesis 5 Talent, Geography, and Offshore R&D 6 The Nature and Direction of Innovation in Global Value Chains for Wind-Energy Technologies 7 Economies of Scope and Relational Contracts: Exploring Global Value Chains in the Automotive Industry 8 Keynote Address: Foreign Direct Investments and Superstar Spillovers: Evidence from Firm-to-Firm Transactions 9 Creation and Diffusion of Knowledge in the Global Firm 10 Firm Selection and Organizational Choice: Complex Patterns of Global Sourcing 11 Are Customs Records Consistent Across Countries? 12 Capital Flows in Global Value Chains 13 Colocation of Production and Innovation: Evidence from the United States 14 Global Value Chain Measurement Methodology: Challenges and Prospects 15 Lessons from the Workshop: A Panel Discussion References Appendix A: Workshop Agenda Appendix B: Biographies of Speakers and Planning Committee Members (as of May 2021) Appendix C: Crosswalk of Workshop Papers to Measurement and Understanding of Global Value Chains