Global Value Chains Participation during the COVID-19 Pandemic: A Dynamic Panel Approach
In recent decades, the emergence of global value chains (GVCs) has changed international trade patterns. Today, the production of goods involves international production sharing, which allows countries to trace the value-added distribution to international trade. However, the COVID-19 pandemic has l...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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MDPI AG
2022-05-01
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| Series: | Economies |
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| Online Access: | https://www.mdpi.com/2227-7099/10/5/121 |
| _version_ | 1797500384832389120 |
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| author | Josephine Wuri Tri Widodo Amirullah Setya Hardi |
| author_facet | Josephine Wuri Tri Widodo Amirullah Setya Hardi |
| author_sort | Josephine Wuri |
| collection | DOAJ |
| description | In recent decades, the emergence of global value chains (GVCs) has changed international trade patterns. Today, the production of goods involves international production sharing, which allows countries to trace the value-added distribution to international trade. However, the COVID-19 pandemic has lowered the trade intensity between countries and can disrupt many sectors. This study uses a dynamic panel approach with the generalized method of moments estimator to investigate the pandemic’s impact on GVC participation. We also investigate whether gross domestic product (GDP) per capita may influence GVC participation, and use institutional quality as control variables. We used the Asian Development Bank Multi-Regional Input-Output (ADB MRIO) data for the 2010–2020 period. We employ backward and forward linkage approaches based on value-added exports to address the overvaluation problems in gross exports. The empirical results illustrate that the COVID-19 pandemic led to a decrease in GVC participation, on average. Furthermore, GDP per capita plays a significant role in GVC participation in backward and forward linkages with higher-quality institutions. |
| first_indexed | 2024-03-10T03:00:59Z |
| format | Article |
| id | doaj.art-96bb4e8dc9884c308527dd379d444cfb |
| institution | Directory Open Access Journal |
| issn | 2227-7099 |
| language | English |
| last_indexed | 2024-03-10T03:00:59Z |
| publishDate | 2022-05-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Economies |
| spelling | doaj.art-96bb4e8dc9884c308527dd379d444cfb2023-11-23T10:44:53ZengMDPI AGEconomies2227-70992022-05-0110512110.3390/economies10050121Global Value Chains Participation during the COVID-19 Pandemic: A Dynamic Panel ApproachJosephine Wuri0Tri Widodo1Amirullah Setya Hardi2Faculty of Economics and Business, Gadjah Mada University, Yogyakarta 55281, IndonesiaFaculty of Economics and Business, Gadjah Mada University, Yogyakarta 55281, IndonesiaFaculty of Economics and Business, Gadjah Mada University, Yogyakarta 55281, IndonesiaIn recent decades, the emergence of global value chains (GVCs) has changed international trade patterns. Today, the production of goods involves international production sharing, which allows countries to trace the value-added distribution to international trade. However, the COVID-19 pandemic has lowered the trade intensity between countries and can disrupt many sectors. This study uses a dynamic panel approach with the generalized method of moments estimator to investigate the pandemic’s impact on GVC participation. We also investigate whether gross domestic product (GDP) per capita may influence GVC participation, and use institutional quality as control variables. We used the Asian Development Bank Multi-Regional Input-Output (ADB MRIO) data for the 2010–2020 period. We employ backward and forward linkage approaches based on value-added exports to address the overvaluation problems in gross exports. The empirical results illustrate that the COVID-19 pandemic led to a decrease in GVC participation, on average. Furthermore, GDP per capita plays a significant role in GVC participation in backward and forward linkages with higher-quality institutions.https://www.mdpi.com/2227-7099/10/5/121participationglobal value chainsCOVID-19 pandemicbackward linkageforward linkageGDP per capita |
| spellingShingle | Josephine Wuri Tri Widodo Amirullah Setya Hardi Global Value Chains Participation during the COVID-19 Pandemic: A Dynamic Panel Approach Economies participation global value chains COVID-19 pandemic backward linkage forward linkage GDP per capita |
| title | Global Value Chains Participation during the COVID-19 Pandemic: A Dynamic Panel Approach |
| title_full | Global Value Chains Participation during the COVID-19 Pandemic: A Dynamic Panel Approach |
| title_fullStr | Global Value Chains Participation during the COVID-19 Pandemic: A Dynamic Panel Approach |
| title_full_unstemmed | Global Value Chains Participation during the COVID-19 Pandemic: A Dynamic Panel Approach |
| title_short | Global Value Chains Participation during the COVID-19 Pandemic: A Dynamic Panel Approach |
| title_sort | global value chains participation during the covid 19 pandemic a dynamic panel approach |
| topic | participation global value chains COVID-19 pandemic backward linkage forward linkage GDP per capita |
| url | https://www.mdpi.com/2227-7099/10/5/121 |
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