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Journal of Economic Integration 2023 September;38(3) :335-359.
DOI: https://doi.org/10.11130/jei.2023.38.3.335
Where Does Value-Added Flow in Gross Exports, Mr. Newton? Global Supply Chains and New Regionalization's Effects in the Asia-Pacific

Dušan Steinhauser 

Department of International Trade, Faculty of Commerce, University of Economics in Bratislava, Slovakia
Corresponding Author: Dušan Steinhauser ,Email: dusan.steinhauser@euba.sk
Copyright ©2023 Journal of Economic Integration
ABSTRACT
The New Trade Theory proposes that participating in global supply chains (GVCs) enhances productivity and economies of scale. However, recent events like the COVID-19 pandemic and Ukraine crisis have exposed the vulnerabilities of GVCs to global risks. This study investigates the relationship between gross exports and the domestic value-added content of such exports, considering various factors, including labor productivity, especially in Belt and Road Initiative countries (A-P Belt and Road Initiative [BRI]). We analyze the role of GVCs using cross-sectional and panel data from the 2021 OECD Trade in Value-Added. Over the period from 2009 to 2018, we observed that countries with increasing productivity exported goods, services, and value-added to other countries experiencing similar productivity. Our findings indicate that export concentration contributes to increased value-added exports. However, we could not validate the effects of R&D spending, the real effective exchange rate, foreign direct investment inflows, and A-P BRI membership contributions using the difference-in-differences method.

JEL Classification
F14: Empirical Studies of Trade
R15: Econometric and Input?Output Models; Other Models
J25:
O47: Measurement of Economic Growth; Aggregate Productivity; Cross Country Output Convergence
Keywords: Global Supply Chains | GVCs | Gravity modeling | Poisson Pseudo-Maximum Likelihood | Trade in Value-Added | Belt and Road Initiative
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