Embedded inequality in global production networks: The causes and consequences of production network formation

Global production networks (GPNs) are seen both as major causes and alleviators of inequality. I trace their formation to the break down of the post-war social structure of accumulation, which incentivized the outsourcing of economic activity with low entry barriers, and the internalization of activity with high entry barriers among lead firms. Thus, GPN formation leads to embedded inequality: lead actors control and coordinate GPNs, which are unequal with respect to the distribution of entry barriers and autonomy across nodes. GPN structure varies by industry, consistent with variation in the height of entry barriers around manufacturing. Buyer-driven networks (BDN) occur in industries where entry barriers to manufacturing are low, and producer-driven networks (PDN) occur in industries where entry barriers to manufacturing are high. I derive cross-nationally comparable indices of dominance in each type of network.;Chapter 3 provides evidence in support of my theory of GPN formation: the producer-driven industry shows lower levels of global outsourcing than does the buyer-driven industry. Moreover, dominant countries in PDNs tend to entrench their levels of producer-driven manufacturing intensity, while those in BDNs reduce their levels of buyer-driven manufacturing intensity, over the course of globalization.;The embedded inequality of GPNs generates contrasting predictions regarding the growth potential accruing to dominant and subordinate positions. Chapter 4 tests each with models that relate economic growth to dominance and subordination in both types of networks. The growth effects to dominance are consistently larger than those to subordination, a divergence that increases as globalization proceeds.;Claims over globalization's affect on global labor market power diverge between predictions of "downward convergence," "upward convergence" or "divergence" across countries. Using a cross-nationally comparative index of "labor market power," I show that the global mean of labor market power rises over the course of globalization, while inequality therein either rises or remains fairly stable. Moreover, I show that (1) the neo-classical Heckscher-Ohlin framework of international trade is consistent with the variation in labor market power, but that (2) these effects largely disappear when I include network power. The unequal distribution of labor market power across countries is largely a function of GPN embeddedness.;Despite the findings of Chapters 3--5, there has been some convergence in the distribution of network power. This is largely driven by the Asian region, which possess a unique development history of "insubordinate subordination"---their ability to integrate into GPNs as subordinate manufacturers, but thereafter to "break the rules" by capturing technology and know how and shifting it into domestic industries that subsequently encroach upon dominant western positions. Thus, to the extent that globalization slows the rising global inequality trend, the main mechanism may be the "insubordinate subordination" of the Asian region. I conclude by suggesting future directions for research on economic globalization and development.