Exogenous and endogenous change in global value chains

Zhan (J Int Business Policy https://doi.org/10.1057/s42214-020-00088-0, 2021) identifies five major forces that will drive the transformation of global value chains (GVCs) and redefine the global trade and investment landscape. The key to understanding GVCs is to recognize the MNEs that control them. A detailed knowledge of differing contexts is required to predict the outcomes of the dynamic processes identified in his paper, but this must be analyzed on a consistent and coherent theoretical basis. The key argument made in this paper is that the impact of these trends can be traced through exogenous changes that work through the internalization, location, and governance decisions of multinational enterprises (MNEs). MNEs also initiate some of these megatrends directly through the creation of new technologies and products and through their direct influence on civil society and policy at all levels of formulation and implementation. These decisions of MNEs interact and evolve together with pressure from civil society and government policy changes to give outcomes for GVCs that are predictable but will be determined by the context of global, national, and local circumstances.