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During 2000–2019, the autoparts-automobile global value chain (AAGVC) underwent significant structural changes from a number of perspectives: micro, meso, or inter-firm relations, macroeconomic, and territorial shifts. This document will focus on recent trade debates on the “new triangular relationship” between the US–China and Latin America and the Caribbean (LAC), and Mexico, and specifically on trade in the AAGVC during 2000–2019. In addition to the discussion on global value chains (GVCs) and its implications, the document analyses in detail qualitative and quantitative global changes in the AAGVC and specifically in US imports during 2000–2019, highlighting the performance of Mexico and China in trade, tariffs, and transportation costs. Conclusions include a set of future research topics.

This study employs the gravity model to estimate the extent of the contribution of six African trade blocs to the global economy using the gravity model spanning from 1980 to 2018. The gravity equation that models the export contributions of the six selected African RECs to the global export is estimated. The estimated gravity model reveals that the long run estimations show that the coefficient estimate for SACU and ECCAS are insignificant in the long run while SACU, EAC and ECCAS as RECs, have insignificant contribution to export in the short run. Our findings, after establishing cointegration, on the other hand show that COMESA has the highest contribution to the global exports, followed by EAC, ECOWAS and SADC with ECCAS and SACU the lowest contributors. The highest contribution of COMESA followed by EAC may be due to the growing economy of member countries like Kenya and Rwanda, while that of COMESA and SADC may be as a result of the large economy of Nigeria and South Africa respectively. This study concludes that African countries are emerging with great export potentials, therefore, governments and private sectors should create the necessary incentives and export policies for the realization of these potentials to maximise the global value chain.

This paper offers preliminary evidence of the extent to which global FDI patterns have responded to the sharp increase in trade barriers since 2018, focusing in particular on the impact of new United States tariffs imposed on imports from China. Using detailed project-level data on new greenfield FDI as well as complementary research, this paper tracks the differential changes in FDI across countries and industries most affected by the trade tensions. There is some evidence of diversion to South-East Asia in specific industries, confirming findings of other research, but the aggregate effect on investment in China is limited and the overall effect on investment in South-East Asia is actually negative. A possible explanation lies in the importance of global value chain linkages as key determinants of firms’ investment decisions.

Increasing uncertainty has hindered the development of international trade in recent years. Participating in the global value chain (GVC) has become one way for Chinese export firms to deal with uncertainty and reduce external risks. Based on trade theory with heterogeneous firms, this study constructs a theoretical framework encompassing uncertainty and GVC participation. We find that uncertainty inhibits the export of firms, but GVC participation can alleviate the negative impact of uncertainty, which is verified through empirical analysis. Additionally, mechanism analysis reveals that GVC participation plays a moderating role through product diversity, market diversity, cost-saving effects, and quality-improving effects. This study demonstrates that in the absence of serious adverse events, GVC is highly efficient. Accordingly, China should actively participate in the governance of the COVID-19 pandemic, reduce the external uncertainty faced by Chinese export firms, promote the return of an efficient GVC, and further ameliorate the negative impact of uncertainty.

The general objective of this paper is to evaluate the effects of Global Value Chain Participation (GVCP) on Current Account Balance (CAB) in African countries. The specific objectives are to (1) identify the type of GVCP that contributes more significantly and positively to African countries’ current account balance and (2) find out whether being landlocked affects a country’s participation in global value chain in Africa. This paper uses panel data from three secondary sources: (1) UNCTAD-EORA database (2018) for forward and backward participation indicators, (2) WDI (2018) for current account balance, FDI, population and trade openness and (3) PWT 9.1 for exchange rates. In a linear panel specification, this research applies the Feasible Generalized Least Square (FGLS) econometric techniques and results highlight firstly that forward GVCP contributes more significantly and positively to CAB in Africa with a coefficient ranging between 1.64 and 2.43 in various regressions. Secondly, the effect of GVCP on CAB is reduced in landlocked African countries as revealed in its negative and significant coefficient of -2.33 as the variables are interacted. This paper recommends that, African countries should embark on forward participation and improve connectivity infrastructure to facilitate the participation of landlocked African economies in global interactions.

This study uses detailed manufacturing census panel data for 2000 to 2014 to explore the relationship between Ethiopian firms’ global value chain (GVC) participation and markups. We find that GVC firms, defined as firms involved in both exporting and importing intermediate inputs, tend to have lower markups relative to non-trading firms and firms that are involved only in material imports. Moreover, the more intensely a firm is integrated into a GVC (measured by the share of export value added and imported inputs in total sales), the lower its markup is. Finally, we explore competition effects at the industry level and find that firms operating in industries with a relatively high GVC presence and suppliers selling inputs to such industries tend to have lower markups owing to horizontal competition and backward linkages, respectively. All of these findings suggest that GVC participation is associated with greater competition for Ethiopian firms.

Este artículo estudia el desempeño comercial de los 12 principales países exportadores de bienes industriales en el periodo 2004-2013, analizando tanto la pretendida asociación existente entre la productividad laboral y la competitividad externa, como el rol de las industrias altamente tecnológicas en el éxito exportador. La aplicación de la metodología de Wang, Wei, y Zhu (2018), a partir del uso de matrices insumo-producto globales, para el caso del comercio de E.U y China, muestra el mejor posicionamiento de E.U en CGV y ejemplifica la relevancia de las nuevas dinámicas productiva globales para la evaluación del comercio internacional a nivel sectorial.

This article provides an overview of India’s participation in global value chains (GVCs). Using multiple databases at the aggregate and industry levels, this article documents the trends in GVC participation of India during the last three decades. Authors further differentiate between India’s backward and forward integration at the country level before evaluating the industry-specific dynamics of GVCs in India. In this study, authors also shed light upon the rising servicification of Indian manufacturing, and highlight the importance of services’ value addition in promoting GVC integration of India. JEL Codes: F1, F15, D57

We estimate the effects of tariff reduction by regional comprehensive economic partnership (RCEP) on global value chains based on simulation. We find that tariff reduction by RCEP has an effect of ...

This paper investigates the determinants of total factor productivity and income growth by taking into account both the position of the industry in the global value chain and the complexity of participation for the period of 1996–2009 for 40 developed and developing countries. Our estimation results clearly show that while all measures of forward GVC participations raise the total factor productivity growth of manufacturing industries, there is no effect of participation into GVCs on the productivity of services sectors. Almost all measures of backward and forward GVC substantially promote the output growth of manufacturing and services industries. These significant results provide strong evidence for the learning by trading hypothesis and indicate the importance of deeper involvement into GVCs for higher sectoral productivity. Substantial evidence for the positive impact of importing and exporting intermediates, participating in GVCs, on sectoral performance imply that the successes of industries highly depend on their efficient integration in the global production process.

Purpose This paper aims to examine the relationship between global value chains (GVCs) and domestic value-added content (DVA) in a panel of 58 countries for the period 2005–2015. Design/methodology/approach First, the authors quantify the refined measures of GVC linkages by using the Borin and Mancini (2019) decomposition technique. Second, the authors apply the feasible generalised least squares method to test the relationship between GVCs and DVA empirically. Findings First, the authors find that GVC links are crucial to the enhancement of DVA. Second, a study at the sectoral level reveals that GVC links in the primary sector raise DVA whilst reducing DVA in the services sector. Third, the authors find that only upstream activities enhance value-added content. Fourth, the authors note the augmenting role played by national policies in mediating the gains associated with GVCs. Finally, the authors note that the outcomes associated with GVCs are consistent when the sample of countries is divided into groups based on income. Practical implications The results lead us to urge policymakers to promote greater integration of business activities into GVCs to reap their benefits. Originality/value This paper contributes to the research on the impact of GVCs on DVA by emphasising the significance of the types of GVC activities and policies that improve DVA.

Perdebatan tentang pelemahan hubungan antara nilai tukar dan ekspor telah meningkat dalam beberapa tahun terakhir, dan meningkatnya tren perdagangan terkait rantai nilai global (Global Value Chain/GVC) diasumsikan menjadi sumber melemahnya hubungan di antara keduanya. Dengan menggunakan data spesifik industri manufaktur, studi ini bertujuan untuk menyelidiki dampak GVC pada hubungan Nilai Tukar Efektif Riil (Real Effective Exchange Rate/REER) dan ekspor di empat negara ASEAN. Estimasi dilakukan menggunakan regresi Least Square Dummy Variable (LSDV) untuk periode sampel dari tahun 2009 hingga 2015. Hasil penelitian ini menunjukkan bahwa di Filipina, koefisien elastisitas nilai tukar ekspor dan partisipasi ke GVC tidak signifikan secara statistik. Sebaliknya di Indonesia dan Malaysia, secara rata-rata, integrasi ke GVC dengan berbagai pengukuran akan menurunkan elastisitas ekspor terhadap perubahan REER sekitar 70% sampai 89%. Lebih lanjut, estimasi terhadap data Thailand dan kelompok empat negara ASEAN menunjukkan bahwa partisipasi pada GVC mengubah nilai dan tanda elastisitas ekspor terhadap REER. Kata Kunci: Ekspor, Nilai Tukar, Rantai Nilai Global Abstract The debate on the issue of the disconnected relationship between exchange rates and exports has risen in recent years, with the growing trend of Global Value Chain (GVC)-related trade assumed to be the source of the weakening link between them. By employing manufacturing industry-specific data, this study aims to investigate the impact of GVC on the nexus of the Real Effective Exchange Rate (REER) and exports in four ASEAN countries. The estimations are conducted using Least Square Dummy Variable (LSDV) regression for the sample period from 2009 to 2015. The findings of this study suggest that for the Philippines, the coefficients of exchange rate elasticity of export and participation to GVC are not statistically significant. Conversely, in the case of Indonesia and Malaysia, integration to GVC, with various measurements, will reduce the REER elasticity of exports by around 70% to 89% on average. Furthermore, the estimation data on Thailand and a group of four countries implies that the presence of GVC changes both the value and the sign of REER elasticity of exports. Keywords: Export, Exchange Rates, Global Value Chain JEL Classification: F14, F15, F31

This paper constructs a large-scale computable general equilibrium model with 26 countries and regions. The model is embedded in the global value chain, trade costs are introduced, and the trade ef...

This paper tries to examine how the COVID‐19 shock affects different countries through their regional integration and their exposure to Global Value Chains (GVCs). Using input‐output tables (EORA 2016), our contribution is threefold. First, building on Pahl et al. (2021), we conceptually revise the approaches to analyse input‐output relationships. We underline the difference between the bilateral flow of value added and trade and distinguish between the producers and consumers of value‐added. Second, we distinguish between the supply and demand channels through which these countries can be affected by the disruptions in GVCs. Third, we apply this empirical exercise on an understudied region, namely, the Mediterranean region that is characterized by its involvement in several trade agreements that might boost their integration into GVCs. Our main findings show that, first, most of the countries have relatively larger backward GVC linkages than forward ones. Second, in the Northern shore of the Mediterranean, Italy and France are net suppliers of value added since they produce more value‐added absorbed abroad than the foreign value‐added they consume. Third, our results highlight also the limited integration between Southern shore partners, whose integration is almost completely driven by linkages with Southern European developed countries.

We analyse the value‐added creation effect of global value chain (GVC) participation activities of APEC member economies, using a fixed‐effects regression model analysis based on country–industry data from Organisation for Economic Co‐operation and Development (OECD) Inter‐country Input–Output Tables. We find that forward participation in GVCs is more desirable than backward participation for creating domestic value‐added and that the industry position in the middle stages of the production line creates higher domestic value‐added per output unit. These results hold regardless of the application of standard Ordinary Least Squares (OLS) or fractional logit for panel data and of the characteristics of the interconnected countries in GVCs (APEC member vs. non‐APEC member economies, Asian APEC vs. non‐Asian APEC members, developed vs. developing countries). This implies that the conventional firm‐ or product‐specific U‐shaped ‘smile curve hypothesis’ is not applicable at the economy‐wide, country–industry level. This finding suggests that depending on the product type, manufacturing industries can be a major driving force for less‐developed APEC member economies to climb the development ladder. Since GVC participation gains are diversified across industries and upgrading country–industry positions in GVCs are challenging for APEC member economies, we strongly recommend that they construct effective domestic value chains and coordinate with other members while upgrading their GVC participation.

This paper bridges the understanding of power in the global value chain literature and the analysis of market power and barriers to entry in competition economics. It draws on competition economics to provide a better understanding of the ways in which bargaining power between firms shapes patterns of value creation and capture along value chains. It also considers the influence which competition laws have on the conduct of large and powerful firms. Through the case studies of supermarkets and petrochemicals in South Africa, the paper shows how the dominant bargaining power of lead firms owes much to the historical impact of government regulations and industrial policy, including those enforced by competition authorities. We conclude by highlighting that choices regarding the type of competition rules to be adopted have important implications for the ability of supplier firms to build capabilities and to upgrade in value chains.

Combined with the global value chain (GVC) and the innovation value chain, this study analyses whether and how global value chain participation (GVCPA) and global value chain position (GVCPO) affec...

Global value chains (GVCs) a re an increasingly important driver of world t rade, and they are relevant in analyzing border policies and trade agreements. Combining methods of value added decomposition and a computable general equilibrium model, we show how tariff liberalization in APEC impacts on measures of integration. The trade agreement increases GVC integration worldwide irrespective of membership. The effects differ by type of integration, namely, forward or backward, depending on the source of intermediate inputs, the membership of countries up- and downstream the supply chain, and the border protection in the base. The analysis reveals some limitations of the presented integration measures in a dynamic context. First, value added incorporates income related to policy measures, and decreasing integration can reflect a lower tax burden and a more efficient network. Second, changes do not allow interpreting the size of effects of underlying variables, and similar changes can result from various underlying developments.

Using a two-stage estimation of matched worker-industry data from 2000 to 2011, this study investigates the impact of global value chain (GVC) integration on wages and the skill premium in the 32 i...

The present brief comment explores some of Christopher Freeman’s main ideas and their influence on my recent and current research. The concepts of broad and narrow National Systems of Innovation (N...

Using the World Input-Output Database from 2000 to 2014 combined with the Database from the World Bank, this paper examines the export promotion effects of FTAs on member countries’ GVC trade. Empi...

This paper investigates the impact of deep preferential trade agreements (PTAs) on total and global value chain (GVC) trade flows. We employ an augmented gravity equation that includes three-dimens...

This paper explores the relationship between financial constraints and firm participation in global value chains (GVC). We use a rich firm-level data belonging to the Indian manufacturing sector fo...

We extend the measure of the global value chain (GVC) decomposition framework to the sub-national regional level based on a new Trans-national Inter-regional Input-Output (TIIO) table , which cover...

Exporting higher-quality and complex products are deemed pathways to economic growth and development. However, producing such products are knowledge-intensive and require quality intermediate inputs and advanced technologies. Integration into global trade networks is increasingly argued to be amongst the pathways to obtain such inputs and technologies, although not all countries may benefit equally from such integration. This paper builds on these arguments and investigates how participation in the global value chain (GVC) affects export-quality. We use a sample of 120 developed and developing countries and find that participation in GVC impacts positively on export quality and, also, brings the export quality of countries closer to the quality frontier, but these effects only work through backward linkages. While this result persists in the sub-sample comprising developing economies, we, however, find that developed countries benefit from both forward and backward linkages in GVC. Overall, the results indicate that GVC participation matters to export upgrading but points to a potential heterogeneity on the channel of impact across countries at different levels of development.

The functional activities, such as management, marketing, R&D and fabrication, carried out by a country or industry is of great importance for its governance and upgrading on the global value chain...

For the past three decades, Eastern European countries have exhibited a noticeable decline in their share of the industrial production sector overall, but not uniformly. Simultaneously, trade liber...

This article addresses issues on the degree of participation in global value chains (GVCs) for emerging economies in the Association of Southeast Asian Nations (ASEAN). The main research question is whether there is a linkage between GVC backward participation, that is, vertical trade defined as the foreign value embedded in exports and logistics performance as a component of service links in the host country. The major contributions of this study are the usage of the UNCTAD-Eora Global Value Chain Database for describing vertical trade and the application of a “structural” gravity model setting for the specification of estimated equations. The statistical observations demonstrate that GVC backward participation in emerging ASEAN economies made substantial progress during the 1990s with per capita GDP growth, and a large gap occurred in the degree of GVC backward participation between forerunners and latecomers in the ASEAN economies. Empirical estimation can also identify a quantitative linkage between GVC backward participation and logistics performance in the host country.

Purpose - The Korean government has been promoting the New Southern Policy (NSP) prior to the onset of the COVID-19 pandemic, which damage global value chain (GVC) The purpose of this paper is to emphasize that the NSP should be developed to provide tangible support in corporate GVC adjustment, away from diplomatic activities in order to offset GVC losses due to COVID-19 and expand export capabilities Design/methodology - Two research methodologies are combined for this paper: A computational general equilibrium (CGE) model is used to estimate the impacts of the COVID-19 pandemic and NSP on Korea's exports, and the decomposition methodology (Wang, Wei and Zhu, 2013) to evaluate the stability of GVC The conventional CGE model was modified to obtain an estimate for decomposition The research methodology adopted in this study was attempted for the first time, and it can be widely used in future GVC research Findings - Results found the effects of COVID-19 reduced Korea's total exports by 27% and GVC by more than 30% In particular, VA in Korea's exports to the NSP region was found to have a huge impact in heavy industries and textiles, and its exports to Vietnam seemed to suffer the largest loss in GVC among ASEAN countries If the NSP is implemented properly, it appears that it could offset much of the negative impacts of COVID-19, implying the importance of the effectiveness of the NSP Originality/value - Many papers have assessed the NSP descriptively, and the GVC has been a topic for many publications However, the impact of COVID-19 on Korea's GVC with the NSP countries has not been quantitatively studied This paper emphasizes that the NSP should be pursued based on the results of quantitative analysis In addition, the research methodology of this paper can be used for other GVC research with relevant modifications

Who leads the robotisation race in Europe? For the answer, this paper develops a novel analytical framework, primarily by applying the concept of the global value chain to robotisation. By doing th...

In this study, using the generalized propensity score on a sample of 172,336 firms, we examine the technology gap between the US and China when Chinese enterprises participate in global value chain...

PurposeThis study aims to investigate current deglobalization against globalization and to hypothesize reasons and drivers of deglobalization. In addition, the study suggests an empirical model to test whether deglobalization exists in the world economy. The consequences of deglobalization are discussed.Design/methodology/approachVarious measures for deglobalization are introduced for monitoring the deglobalization of a country, and statistical measures are reported. The research framework for deglobalization and empirical models are suggested. The relationship between deglobalization and globalization is being modeled using three KOF globalization indexes: economic, political and societal. This study used panel data from 1970 to 2017 for developed and developing countries to determine the degree of deglobalization.FindingsDeglobalization has been found empirically since the global financial crisis. Deglobalization is estimated by the decreasing trend of import share in a country's gross domestic product and is influenced by manufacturing imports, country's income divide and political globalization. Both economic and societal globalizations have negative influence on deglobalization. Deglobalization is more apparent in developed countries than in developing countries, and the deglobalization trend will continue in diverse formats.Research limitations/implicationsThis study limits the use of few variables to test the antecedents of deglobalization. Another study can be done to extend preceding variables and estimate the consequences of deglobalization, which may segregate the globalization effect. The international business executive should understand the complexity of deglobalization and consider business benefits and risks to be encountered.Originality/valueThis study used panel data from 1970 to 2017 for developed and developing countries to determine the degree of deglobalization.

This paper studies the relationship between the changing domestic segment of global value chains and the return of state capitalism in China. To this end, we propose a method to estimate an extended input-output (IO) table that tracks inter-sector transactions between different types of firms in a domestic economy. The method is an application of constrained optimization, which relies on basic information from a country's national IO table, as well as sector- and firm-level data. We also propose a way to construct bootstrapped standard errors for any global value chain (GVC) measures estimated from the extended IO tables. We then use the extended IO table to study the domestic segment of GVC in China. We find that, not only is state-owned enterprises’ (SOEs) domestic value-added to gross exports ratio much higher than those of other firms, but it also increased significantly from 1.2 in 2007 to 1.7 in 2010. Our findings suggest that, even after years of privatization, SOEs still play an important role in shaping China's exports.

Participation in global value chains (GVCs) has become a central topic in trade and development policy. It has opened new ways to achieve industrial upgrading. However, some theoretical models suggest that not all countries will upgrade through participation in GVCs. Using panel data from the World Input-Output Database, we examine the effects of backward and forward GVC participation on three dimensions of industrial upgrading (process, product and skill upgrading). We find that backward GVC participation provides more upgrading opportunities for developing countries as it enables a less developed country to import sophisticated inputs. This activates learning through embodied knowledge. In contrast, forward participation has higher level of upgrading effect on developed countries.

In Decoding China’s Export Miracle, Xing’s objective is to explain how a developing country like China became a leading exporter of high-technology products to international markets, in the process...