Article Global Business Review 1–14 © 2019 IMI Reprints and permissions: in.sagepub.com/journals-permissions-india DOI: 10.1177/0972150918822109 journals.sagepub.com/home/gbr 1 Lahore School of Economics, Lahore, Pakistan. 2 Department of Economics, COMSATS University Islamabad, Lahore Campus, Pakistan. Corresponding author: Rao Muhammad Atif, Department of Economics, COMSATS University Islamabad, Lahore Campus 54000, Pakistan. E-mail: raoatif@cuilahore.edu.pk Global Value Chain: An Analysis of Pakistan’s Textile Sector Ayesha Javed 1 Rao Muhammad Atif 2 Abstract Global value chains (GVCs) dominate international production, world trade and investment flows today. This study examines the international fragmentation of production set by GVCs in the textile sector of Pakistan. The study quantifies the data at two- and four-digit level of harmonized code and compares it with top 15 textile exporters around the globe. The estimates through revealed comparative advantage indicate that Pakistan has a competitive edge in cotton and textile made-ups. This indicates that Pakistan needs to bring structural changes by diversifying its product range, reforming tariff procedures, improving working conditions, developing skills and developing cluster in order to promote its exports in GVCs. Keywords Global value chain, textile sector, fragmentation, comparative advantages, Pakistan Introduction In recent times, international production, trade and investment rest heavily on global value chains (GVCs). This globalization of production processes allows different stages of production to take place in different geographical locations (Baldwin &Venables, 2013) and helps them to enhance their production capacity by minimizing cost and maximizing profits (Asian Development Bank, 2014). Pakistan’s textile sector consists of several sub-sectors, which makes it the longest value chain in the manufacturing indus- try (Government Textile Industry, 2015). Cultivation of raw cotton is the first stage of value chain and leads to the manufacturing of readymade garments and made-ups. Moving along the value chain pro- vides a large value addition at each stage as one moves from cotton ginning to readymade garments. The textile sector is a significant contributor to Pakistan’s economy and is the largest manufacturing sector of Pakistan (Hamid, Nabi, & Zafar, 2014). It is the fourth largest producer of raw cotton in the world. According to the Pakistan Bureau Survey 2016 (PBS), the textile industry contributes 62 per cent to the