Nicholas Trebat

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Finance, Trade, and Income Distribution in Global Value Chains: Implications for Developing Economies and Latin America

Global Values Chains (GCVs) led by transnational corporations (TNCs) have reshaped the world division of labor over the past two decades. GVCs are pervasive in low technology manufacturing such as textile and apparel as well as in more advanced industries like automobiles, electronics, and machines. This hierarchical division of labor generates wild competition at the lower value-added stages of production, where low wages and low profit margins prevail for workers and contract manufacturers in developing countries.