Date Available

1-13-2023

Year of Publication

2023

Document Type

Undergraduate Capstone

College

Undergraduate Education

Department

Public Policy and Administration

First Advisor

Dr. Cory Curl

Abstract

This study will investigate the relationship between global value chain integration and financialization in the Global South. It is intended for policy research committees in international organizations such as the United Nations (Commission on Trade and Development Special Committee on Cization), the International Monetary Fund (Development Committee), the World Trade Organization, and World Bank. The global production network represents the international division of production through intermediate offshoring, while financialization represents the entrance of traditionally nonfinancial actors (namely firms, governments/banks, and households) into the financial system.

Attempting to use a heterodox framework, this paper builds upon literature that synthesizes the two as “subordinate financialization” in the Global South. Global North-led production chains have facilitated subordinate financialization in developing countries by directly subjecting contract firms in developing countries to financial interests and shareholder value maximization. They also create competition amongst Global South firms to financialize so they appear attractive to investors and can maintain themselves against monopolies. This has resulted in heightened vulnerability and inequality within
developing countries, along with many additional consequences. Addressing this phenomenon will require international cooperation to curb productive and (now) financial subordination. Future work will aim to develop the strength of the theory, data analysis, and policy recommendations in this paper.

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