sellers around the world. This network achieves a global reach with predominately Western- based TNCs sourcing production to countries that boast weak regulatory environments and inexpensive labor costs. GVC analysis integrates the details of jobs, technologies, standards, regulations, products, processes, and markets in specific industries and places (Gereffi 2005).
GVC research has its foundation in world-system theory, which posits that countries are located in the core, periphery, and semi-periphery of the global economy, with their position reflecting their development capabilities. World-system theory argues that power and hierarchy are embodied in the relations between nation-states, but it lacks an appreciation of the powerful role of TNC lead firms, which operate fluidly across borders. Building from core principles of the world system while shifting the focus to firm behavior, the first incarnation of GVC analysis was the global commodity chains (GCC) framework. Global commodity chains evolved into global value chains when researchers who studied industry clusters in specific geographic spaces sought to understand how local economic processes are conditioned by global arrangements (Gereffi and Kaplinsky 2008). Furthermore, by putting the term “value” into the framework, researchers were able to show where value is captured in a particular industry, which firms have that value and where they are located, and how firms (and the countries they are based in) can move to a higher value position in their industries.
Traditionally, GVC analysis was applied to manufacturing industries such as apparel (Gereffi 1999), electronics (Sturgeon 2002), and automobiles (Humprey and Memodovic 2003). Within these studies, researchers used the approach to explain the location of the industry and how particular countries are incorporated in it; the hierarchical arrangements between countries and firms; and the institutional underpinnings of global value chains that influence firm behavior. The GVC framework analyzes why and how an industry is globally organized and where change is most likely to happen. Its integrative conceptual scheme connects the global and local levels of analysis so that anyone interested in reform – researchers, firms, policy-makers, or NGO activists – can search for leverage points whereby specific business practices and development conditions can be championed or criticized, and pathways for change can be sought.
Countries that wish to upgrade into higher value segments of an industry, or to switch to an entirely different one, can use the framework to understand their competitive strengths, along with the challenges they must overcome to improve their position. Labor unions or activists can use the framework to identify why firms move offshore and to exert pressure on firms to provide