Does global value chain participation induce economic growth? Evidence from panel threshold regression

Document Type

Article

Source of Publication

Applied Economics

Publication Date

1-1-2022

Abstract

We investigate the threshold effects of GVC participation and its disaggregated level (forward and backward participation) on economic growth for 62 economies for the period 2000–2018. Our paper is one of the first to analyse the multiple regime effects of GVC participation on economic growth. We find that GVC participation positively impacts economic growth in a country with higher economic growth in both the aggregate and disaggregate analysis. Contemporaneously, it is negatively associated with economic growth in countries with lower economic growth. The coefficient value of forward participation for lower growing economies is higher in the first and second regime than the backward participation, which implies that forward participation has more deleterious effects on economic growth in the less developed and developing economies. The growth effects of forward and backward participation indicate that both have different effects on economic growth in the moderate growing economies, which implies that the direction of GVC participation does matter in determining economic growth in the moderate growing economies.

ISSN

0003-6846

Publisher

Informa UK Limited

Disciplines

Business

Keywords

economic growth, Global value chain participation, multiple regime effects, panel threshold regression with fixed effects

Scopus ID

85135570430

Indexed in Scopus

yes

Open Access

no

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