Production Networks and Less Developed ASEAN Countries’ Export Growth

For developing countries, it is an important challenge to maximize profits and minimize risks through participation in global value chains (GVCs). This paper focuses on the impact of participation in GVCs through trade in intermediate goods on developing countries’ export growth. In particular, it examines the impact of GVC participation on the number, scale and distribution of exporting firms in Cambodia and Laos, based on exporting firms’ dynamics data and international input-output aggregated by type of export goods of those two countries. As a result of the analysis, it is found that in Cambodia and Laos, the degree of participation in GVCs affects individual exporting firms’ behavior and leads to changes in in the number, scale and distribution of exporting firms, thereby affecting the countries’ export growth. The analysis results indicate that if developing countries are to increase the number and scale of exporting firms and to achieve export growth by promoting the growth of exporting firms with high productivity through efficient resource allocation, they need to implement trade and industrial policies while taking into consideration the impact of participation in GVCs on exporting firms’ behavior.