Shareholders as the main beneficiaries of globalized production: Corporate financialization and value capture along global value chains

Global value chain (GVC) analysis examines the distribution of value between lead firms and suppliers but overlooks profit leakage to actors outside GVCs, especially financial markets. We address this gap by integrating GVC analysis with the corporate financialization literature, examining value capture between shareholders, lead firms, and suppliers. Using S&P Capital IQ data, we analyze lead firms’ financialization of objectives, investments, operations, and value capture across four GVCs (apparel, automotive, copper, and coffee/cocoa) from 1993 to 2022. We show that GVCs serve lead firms as a “source of value” by lowering sourcing costs to increase profit margins and shareholder returns, and as a “source of liquidity,” extending supplier payment terms that enhance working capital. Overall, shareholders emerge as the main beneficiaries of GVCs. While issuing equity plays a minor role in financing lead firms, these firms sustain stock markets through large shareholder payouts, funded through the profits generated in GVCs.