On December 13, 2018, the Center for Positive/Empirical Analysis of Political Economy of the Top Global University Project at Waseda University welcomed Professor Pol Antràs of Harvard University and organized a seminar entitled “On the Geography of Global Value Chains.” Professor Antràs specializes in international trade, and particularly as a pioneer in intra-firm trade theory, he has studied overseas outsourcing of firm’s production activities and global value chain (GVC) from both theory and empirical viewpoints. His papers have been published in top journals, such as the Quarterly Journal of Economics, the Journal of Political Economy and Econometrica.
In this seminar, Professor Antràs presented his research on general equilibrium model of GVC, which is a part of series of his works. GVC is considered as an international link between separate production activities of firms, which has attracted much attention in terms of policy. He regarded the GVC as a multi-stage production pathway, built a model where companies select the optimal production route, and formulated as a general equilibrium theory, considering more general trade costs such as geographical barriers. In addition, based on the constructed model, a structure estimation using actual multinational input-output table data such as the World Input Output Database made it possible to evaluate profit driven by international trade. It was found that the profit was underestimated in previous literature where GVC was not taken into account. He emphasized that these theoretical frameworks are useful in developing a quantitative evaluation of trade policy etc, where exact counterfactual simulation is required as an evidencebased policy, while it is still necessary to improve the model.
Many students and faculty members from within and outside of the university attended the seminar and participated in the active discussion. Many question and answers were exchanged with participants specializing not only in international trade but also in other fields, which reflect the high degree of interest in GVC’s international production activities and its impact.