The Impact of the Outward and Inward FDI on Global Value Chains
What kind of trade agreements should a country choose? Regional trade agreements, multilateral trade agreements, or both? What's the role of a country's outward foreign direct investment (OFDI) and foreign direct investment (FDI) in its participation and position in global value chains (G...
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| Format: | Article |
| Language: | English |
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EconJournals
2021-11-01
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| Series: | International Journal of Economics and Financial Issues |
| Online Access: | http://mail.econjournals.com/index.php/ijefi/article/view/11950 |
| _version_ | 1797919536128720896 |
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| author | Hang Su Yao Fu |
| author_facet | Hang Su Yao Fu |
| author_sort | Hang Su |
| collection | DOAJ |
| description |
What kind of trade agreements should a country choose? Regional trade agreements, multilateral trade agreements, or both? What's the role of a country's outward foreign direct investment (OFDI) and foreign direct investment (FDI) in its participation and position in global value chains (GVCs)? Is a country's research and development spending conducive to breaking the "low-end locking" of FDI? Based on the World Input-Output Tables (WIOTs) released in 2016, this paper computes the indicators of GVC participation and position and identifies the feature of the production division, providing a reference for promoting regional and multilateral trade agreements. This paper uses feasible generalized least squares (FGLS) and system generalized method of moments (SYS-GMM) to examine the impact of a country's outward and inward FDI on its GVC participation and position. The empirical results imply that a country's OFDI promotes its GVC participation and fosters its upgrading within industries in GVCs, while FDI inhibits the upgrading of GVCs, though it promotes a country's GVC participation. In addition, a country's research and development spending can be conducive to breaking the "low-end locking" effect of FDI.
Keywords: Outward Foreign Direct Investment, Inward Foreign Direct Investment, Global Value Chains, World Input-Output Tables, Feasible Generalized Least Squares
JEL Classifications: C33, F21
DOI: https://doi.org/10.32479/ijefi.11950
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| first_indexed | 2024-04-10T13:47:11Z |
| format | Article |
| id | doaj.art-c1ba3848248c4d46803db80b1fe5f356 |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T13:47:11Z |
| publishDate | 2021-11-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-c1ba3848248c4d46803db80b1fe5f3562023-02-15T16:10:56ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382021-11-01116The Impact of the Outward and Inward FDI on Global Value ChainsHang SuYao Fu0College of International Economics and Trade, Dongbei University of Finance and Economics, Dalian, China What kind of trade agreements should a country choose? Regional trade agreements, multilateral trade agreements, or both? What's the role of a country's outward foreign direct investment (OFDI) and foreign direct investment (FDI) in its participation and position in global value chains (GVCs)? Is a country's research and development spending conducive to breaking the "low-end locking" of FDI? Based on the World Input-Output Tables (WIOTs) released in 2016, this paper computes the indicators of GVC participation and position and identifies the feature of the production division, providing a reference for promoting regional and multilateral trade agreements. This paper uses feasible generalized least squares (FGLS) and system generalized method of moments (SYS-GMM) to examine the impact of a country's outward and inward FDI on its GVC participation and position. The empirical results imply that a country's OFDI promotes its GVC participation and fosters its upgrading within industries in GVCs, while FDI inhibits the upgrading of GVCs, though it promotes a country's GVC participation. In addition, a country's research and development spending can be conducive to breaking the "low-end locking" effect of FDI. Keywords: Outward Foreign Direct Investment, Inward Foreign Direct Investment, Global Value Chains, World Input-Output Tables, Feasible Generalized Least Squares JEL Classifications: C33, F21 DOI: https://doi.org/10.32479/ijefi.11950 http://mail.econjournals.com/index.php/ijefi/article/view/11950 |
| spellingShingle | Hang Su Yao Fu The Impact of the Outward and Inward FDI on Global Value Chains International Journal of Economics and Financial Issues |
| title | The Impact of the Outward and Inward FDI on Global Value Chains |
| title_full | The Impact of the Outward and Inward FDI on Global Value Chains |
| title_fullStr | The Impact of the Outward and Inward FDI on Global Value Chains |
| title_full_unstemmed | The Impact of the Outward and Inward FDI on Global Value Chains |
| title_short | The Impact of the Outward and Inward FDI on Global Value Chains |
| title_sort | impact of the outward and inward fdi on global value chains |
| url | http://mail.econjournals.com/index.php/ijefi/article/view/11950 |
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