Global value chain linkages and domestic value-added content: Empirical evidence

Abstract

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.

Analysis of Energy International E-commerce Innovation Strategy Based on Global Value Chain

“…Through the global integration of resources and allocation of production factors, the advantages of individual countries and regions have been brought into full play, providing a strong impetus for global economic growth. Under the framework of global value chains, production activities are no longer confined to a single country but realize synergistic development through transnational corporations (TNCs) and multiple links in the global supply chain, forming a more complex and diversified production pattern (Jangam & Rath, 2021). As digital and information and communication technologies continue to advance, GVCs' operating mode has evolved and optimized.…”

Global Value Chains and Exchange Rate Disconnect*

“…The extant literature referred to the GVC in various terms, such as vertical specialisation, fragmentation of production and production sharing (Hummels et al ., 2001; World Bank, 2020). Several studies have looked at the spillover effects of GVCs (Javorcik, 2004; Gebreeyesus & Sonobe, 2012; Keane, 2012; Iršova & Havránek, 2013; Constantinescu et al ., 2019; Jangam & Rath, 2020a, 2020b, 2021a, 2021b; Pahl & Timmer, 2020; Raj‐Reichert, 2020). The underlying reason for a firm to share production across countries is the access to varied and quality inputs, efficiency gains and specialisation in a specific task with comparative advantage (Taglioni & Winkler, 2016; Criscuolo & Timmis, 2017; Constantinescu et al ., 2019).…”