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PKSG Working Paper Series

Working Paper PKWP1804

A dynamic spatial model of global governance structures

March 2018

Giorgos Galanis, Ashok Kumar

This paper presents a novel understanding of the changing governance structures in global supply chains. Motivated by the global garment sector, we develop a geographical political economy dynamic model which reflects the interaction between bargaining power and distribution of value among buyer and producer firms. We find that the interplay between these two forces, in combination with the spatial specificities of global production, are necessary and sufficient to drive governance structures towards an intermediate position regarding their level of explicit coordination and power asymmetry.

Keywords: Global value chains, global production networks, uneven development, disequilibrium dynamics, monopsony power

JEL classification: D02: Institutions: Design, Formation, Operations, and Impact D43: Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection E32: Business Fluctuations; Cycles F60: Economic Impacts of Globalization: General R10: General Regional Economics (includes Regional Data)

Download: Working Paper PKWP1804