Extending unit structure analysis to global value network approach: the case of the Japanese automobile industry

Abstract As economies become increasingly globalized and production processes are increasingly offshored, it has become essential to clarify the global supply chains to which each country’s industries belong. This study examines countries’ participation in global supply chains by analyzing how domestic industrial groups form networks that connect with global production systems. The approach of this paper consists of two steps. First, while Johnson and Noguera (2012) and Timmer et al. (2013) provided foundational frameworks for global value chain (GVC) analysis, this study introduces a new theoretical approach based on Ozaki’s (1980) unit structure analysis. Earlier studies estimate value added by defining destination countries as final consumers or producers, whereas Kuroiwa (2021) integrated unit structure analysis to present an alternative estimation of total value‑added flows to destination countries. Extending this framework, the present study identifies destination countries as importers involved in subsequent production stages and represents the upstream value‑added structure as a network. Second, using this framework and following Kagawa et al. (2015), this study employs network diagrams to analyze Japan’s automobile industry and its bilateral relationships with the U.S. and China from 2002 to 2022. The results highlight China’s development of domestic industrial networks that enable active participation in GVCs.