Global Value Chains, Multinational Corporations and Food Security: Essential Theoretical and Methodological Challenges for a Sustainable Policy Agenda
Marina Papanastassiou and George Mergos
As the United Nations Conference on Trade and Development (UNCTAD) first observed in its 2011 World Investment Report (WIR 2011) , there are two new major developments shaping global Foreign Direct Investment (FDI) trends. The first is the rising importance of developing economies as inward and outward FDI investors, representing
M. Papanastassiou (h)
G. Mergos (h)
Department of Economics, National and Kapodistrian University of Athens, Athens, 105 59, Greece
© The Author(s) 2017
G. Mergos, M. Papanastassiou (eds.), Food Security and Sustainability, DOI 10.1007/978-3-319-40790-6_5
half of the top 20 host economies for FDI and just under a half of the top 20 outward investors (9) respectively in 2014 (WIR 2015). The second is the expansion of Multinational Corporations’ (MNCs’) international production networks through Non-Equity Modes (NEMs). According to UNCTAD, MNCs’ cross-border NEMs are estimated to be worth more than $2 trillion of sales, expanding most rapidly in developing and emerging countries. This results in simultaneously complex internalized and externalized Global Value Chains (GVCs) (WIR 2013).
In this chapter we analyse MNC-generated GVCs by integrating two distinctive strands of the literature. One strand originates GVC analysis in the world system and Global Commodity Chain (GCC) theories (Kaplinsky and Morris 2001; Bair 2005). The other strand is International Business (IB), which focuses on the evolution and impact of MNCs on globalization. Today, global production networks are mostly led by MNCs and are organized through GVCs creating a close link between trade and FDI. According to UNCTAD (WIR 2013, p. x), GVCs “involve crossborder trade of inputs and outputs taking place within the networks of affiliates, contractual partners and arm’s-length suppliers of MNCs”.
We argue that a lack of understanding of how MNCs’ subsidiaries shape and change GVCs creates a theoretical, methodological void. Research on GVCs has failed to capture the determining role of the MNC network (including NEMs) and in particular the roles of subsidiaries. At the same time, the IB literature similarly does not fully integrate the evolution of subsidiary roles in the analysis of GVCs. In this chapter we bridge these two theoretical aspects in order to establish an improved methodological framework, especially with a view to enriched policy recommendations.
In doing so, we focus on the agro-food sector, as food security is a priority Sustainable Development Goal (SDG), to highlight the theoretical and methodological challenges faced in addressing viable policy recommendations. Not only is the interrelationship between GVCs and MNCs “industry and firm-centric” (Gereffi and Christian 2009, p.6) but additionally, agro-food value chains reach deep into the fabric of developing countries. Finally, on the basis of this analysis we draw conclusions on the theoretical and methodological solutions available for the policy agenda.