Since Hall and Soskice’s seminal edited volume of 2001, comparative political economists have analysed countries’ economic performances and structures in terms of ‘varieties of capitalism’. Both theoretically and methodologically, however, these analyses have conceived the economic structures of countries and the international trade flows they give rise to in terms of “inter-industry”, providing institutional explanations for why countries specialise in certain product categories rather than in specific tasks. The rise of global value chains as a defining characteristic in the global economy and the concomitant literature thus provides three sets of challenges for this perspective. Methodologically, the question arises if and how the dependent variable in the varieties of capitalism literature (i.e. different economic specialisation patterns) can and should be adapted to the global value chains approach to measuring value added? Theoretically, how can institutional differences account for different specialisation patterns along global chains of value added instead of between product categories? And finally, how does the reality of global value chains challenge the conclusion of the varieties of capitalism literature that different varieties of capitalist political economies are sustainable in a global economy? We will seek answers to these questions by empirically focusing on the debate on trade imbalances within the euro area and studying how a global value chains perspective alters the parameters, findings and conclusions of this debate.
