Author(s)

Yansheng Zang, Dawei Li, Changyong Yang, Qiong Du

May 2011
Abstract

This article studies the characteristics of the global pharmaceutical industry value chain and China’s position in it, using the tools of value chain analysis, the Grubel & Lloyd (GL) index, and an input-output model. Research shows that in the global pharmaceutical value chain, proprietary medicine’s value chain belongs completely to the producer-driven type, and the core added value is mainly from the input of research and development (R&D). Meanwhile, in the nonproprietary medicine value chain, raw medicine is comparatively independent and has a weak relation with the R&D stage. Based on the aforementioned findings, we conduct a concrete study of China’s position in the global pharmaceutical industry value chain. The results of the study show that China now mainly produces nonproprietary medicine and stands at the lowest point of the “smile curve.” Based on this, we calculate the Vertical Specialization (VS) Index, and analyze China’s position in the R&D stage of the world pharmaceutical value chain. We conclude that China’s cheaper labor cost is the main reason why multinational companies move their clinical trials to China.

Tags(s): China Pharmaceuticals Value Chain
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Author(s)

Greg Linden, Jason Dedrick, Kenneth L. Kraemer

May 2011
Abstract

Globalization skeptics argue that the benefits of globalization, such as lower consumer prices, are outweighed by job losses, lower earnings for U.S. workers, and a potential loss of technology to foreign rivals. To shed light on the jobs issue, we analyze the iPod, which is manufactured offshore using mostly foreign-made components. In terms of headcount, we estimate that, in 2006, the iPod supported nearly twice as many jobs offshore as in the United States. Yet the total wages paid in the United States amounted to more than twice as much as those paid overseas. Driving this result is the fact that Apple keeps most of its research and development (R&D) and corporate support functions in the United States, providing thousands of high-paid professional and engineering jobs that can be attributed to the success of the iPod. This case provides evidence that innovation by a U.S. company at the head of a global value chain can benefit both the company and U.S. workers.

Tags(s): United States Advanced Technology Innovation Labor Value Chain
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Author(s)

Alexander B. Hammer, James A. Kilpatrick

September 2006
Abstract

This paper examines significant China-Latin America trade patterns that have emerged between 1999 and 2005, and assesses implications of these developments on these trading partners’ future economic relationship. We show that China’s iron, copper, and soybean imports from Latin America have become increasingly concentrated; that China and Latin America are rapidly becoming interconnected on telecommunications and computer manufacturing supply chains, with China supplying parts for assembly in Latin America; and that Chinese-made electronic and textile consumer goods have rapidly penetrated Latin American markets. The implications of our findings suggest that while there are many benefits of deeper economic integration to both sides, the vulnerabilities are likely to be predominantly borne by China’s Latin American trading partners.

Tags(s): China Latin America & Caribbean Value Chain
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