Global value chain (GVC) analysis has little to say about the interaction between regions and global chain dynamics. However, recent calls to address broader development issues have resulted in efforts to incorporate a spatial dimension in GVC analysis. Addressing this issue, the paper argues that GVC analysis needs to be combined with the examination of livelihoods at settlement level. Livelihood diversification – or lack thereof – indicates particular settlement trajectories that constitute regional development pathways. It is also suggested that the understanding of how regions are shaped by value chain dynamics will improve by adding elements from global production network (GPN) theory to the combined methodology, namely by an examination of territorial embeddedness and value (creation, enhancement, capture, distribution) at settlement level.