The drivers of global value chain (GVC) participation in EU member states

Abstract

Integration within the EU single market increases the interconnection and interdependence of the EU economies. Global value chain (GVC) participation has become one of the most widely used indicators to measure the dispersion of the production process among different countries. The EU member states rate differently in the GVC participation index. The highest participation is in Luxembourg and Slovakia and the lowest is in Croatia. The aim of this paper is to identify the most important variables that influence the GVC participation index in the EU member states (EU-15 and EU new member states). The research employs dynamic panel data (GMM) methodology. The obtained results are very similar for the EU-15 and EU-NMS indicating that the most important drivers of GVC participation are: GDP growth, lag GVC participation, FDI, development of financial sector, share of services in GDP and share of high-tech products in export, and level of wages. However, the indicators and strength of the influence of some of these variables differ between the two groups of countries.

Cointegration analysis and VECM of FDI, employment, export and GDP in Croatia (2002-2017) with particular reference to the global crisis and poor macroeconomic governance

“…(3) (4) ployment, exports and GDP were exogenous in the short term. However, the FDI variable adjusts to the long-run equilibrium and is statistically significant (see Kersan-Škabić, 2019).…”

The impact of preferential trade agreements on bilateral trade: A structural gravity model analysis

“…Scholars have investigated the effect of PTAs on intermediate trade from GVCs perspective and found that PTAs can facilitate supply chain activity. When decomposing bilateral trade into different components, they mainly focus on the average effect of PTAs on GVCs (using a dummy variable to measure PTAs) and the effect of provisions related to services, investment, and competition on GVCs [30][31][32]. Starting from the product-based coverage of PTAs and testing its effect on different types of trade is meaningful in the global production network.…”

Global Value Chains (GVC) Pada Komoditi Primer dan Manufaktur: Studi ASEAN 6

“…Arus investasi asing serta diversifikasi produk ekspor mendorong backward participation pada wilayah ECOWAS (Economic Community of West African States) (Tinta, 2017), sedangkan pada wilayah Uni Eropa pada umumnya lag partisipasi GVC, PDB perkapita serta pertumbuhan PDB memberikan dampak yang positif dan signifikan. Perbedaan terjadi jika dikelompokkan pada anggota baru Uni Eropa, penelitian dan pengembangan serta intensitas arus investasi asing mempengaruhi partisipasi GVC sedangkan arus investasi asing tidak terlalu berpengaruh pada Uni Eropa secara keseluruhan (Kersan-Škabić, 2019). Penelitian tersebut menunjukkan bahwa faktor yang mendorong partisipasi GVC memiliki perbedaan pada tiap wilayah karena perbedaan struktur ekonomi, geografi dan tingkat kemajuan suatu wilayah.…”