Global value chain participation and current account imbalances

Global Value Chain Participation and Current Account Balances in Landlocked African Countries

“…Results from this two forward participation indicators explain the fact that most landlocked African countries' exports is constituted of raw material or unprocessed intermediary products needed by other actors in the global chain networks. Working on GVC participation and current account imbalances using the IMF EBA, it was suggested that countries which exhibit stronger GVC participation also display higher current account surpluses [29]. Their detail results show that backward and forward participation positively and significantly relate to current account balances.…”

“…Very few empirical works have analyzed the effect of global value chain participation on the current account balance. However, a causal link was expressed between increased levels of global value chain participation (GVCP) and increases in a country's current account [29]. Taking location as the main factor of participation, another author found that most African landlocked countries are located in upstream (forward participation), and provide mainly raw materials to the different networks of value chain while non-African landlocked countries are highly engaged in the downstream production (backward participation) close to the final consumers [30].…”

“…Here, the contribution of each determinant on the current account balance is investigated upon with the choice of control variables being guided by the literature on the determinants of current account balance. Our specification is similar to that express in a paper analyzing Global Value Chain Participation and Current Account Imbalances [29]. Global value chain participation (GVCP) which is our target variable has two main directions of participation in the literature to suit the objective of this paper.…”

European imbalances and shifts of global value chains to the Central European periphery: role of institutions

“…This paper follows on from Brumm et al (2016), one of the few studies evaluating the effects of participation in global value chains on current account imbalances. Brumm et al (2016) came to the conclusion that economies which demonstrate higher GVC participation also exhibit larger current account surpluses, as the positive effect on trade balance surpasses the negative impact on the balance of primary incomes. This is true especially for backward participation, which affects current account balance much more than forward participation.…”

Os determinantes das exportações convencionais e das cadeias globais de valor: uma análise em painel

“…O artigo deRubínová (2017) investiga o impacto dos acordos comerciais sobre os fluxos comerciais de produtos manufaturados de 52 economias em intervalos de 5 anos entre 1995 e 2010, baseado no modelo de equação gravitacional, a partir da análise dos fluxos comerciais bilaterais em termos de valor adicionado. Os resultados mostram que os acordos de livre comércio reforçam a participação nas CGV entre economias de renda alta e países de renda mais baixa, além de indicar que a liberalização do comércio de serviços é essencial para a inclusão de economias menos desenvolvidas nas CGV, enquanto as provisões de investimento são cruciais para o aumento da participação em posições mais a montante nas CGV Brumm et al (2018). procurou encontrar uma relação de causalidade entre o aumento dos níveis de participação nas CGV e o aumento do saldo da conta corrente dos países.…”