Weak sectors and weak ties? Labour dependence and asymmetric positioning in GVCs

Focusing on the labour requirements incorporated into GVCs, we develop a novel, non-conventional measure of learning capabilities, representing a proxy for the knowledge embodied in the division of labour within global production networks. In order to capture the division of labour and of embodied knowledge, we move from monetary flows of production, or value-added, to labour embodied in the I‒O linkages. After constructing a new indicator, Bilateral Net Labour Dependence, we estimate its relationship with a measure of industry performance, namely labour productivity, seeking to challenge the established findings that generally report a positive effect of GVC participation for industry-level productivity. Our conjecture is that being in a weak position in terms of (net) labour provision results in an overall weakening of the capabilities of offshoring industries. We corroborate the conjecture with a panel analysis of 38 countries and 15 industries for the time period 2000–2019.