ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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A Note on Profits, Rents and Wages in Global Production Networks

What are the consequences for profits, rents and wages of the splintering of production tasks across firms in different countries? Such global production networks allow the concentration of rents in lead firms, with some share of these rents possibly being shared with labour. However, profits and wages in competitive production segments, largely located in developing countries, will tend towards market-based minima. Various combinations of product and labour market conditions and their outcomes are analysed in this paper. It ends with a discussion of the different routes by which wages might be increased in such a system of global production networks.

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