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Linking into Global Value Chains Is Not Sufficient: Do You Export Domestic Value Added Contents?

Author

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  • Banga, Rashmi

    (Unit of Economic Cooperation & Integration among Developing Countries, UNCTAD)

Abstract

This paper compares alternative ways of measuring participation of a country in Global Value Chains (GVCs) and estimates distribution of gains among countries in terms of countries’ shares in total value-added created by trade under GVCs. Using the OECD-WTO database on Trade in Value Added, this paper shows that 67% of total global value created under global value chains, accrue to OECD countries while share of NICs and BRICs countries is 25%. Only 8% of total value added is shared among all other developing countries and Least Developed Countries (LDCs). Linking into Global Value Chains is not enough for taking gains. Policy should be designed to raise forward linkages, that is, exporting domestic value-added contents. Trade-led growth is more complex than it seems.

Suggested Citation

  • Banga, Rashmi, 2014. "Linking into Global Value Chains Is Not Sufficient: Do You Export Domestic Value Added Contents?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 29, pages 267-297.
    • Handle: RePEc:ris:integr:0629
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    More about this item

    Keywords

    Global Value Chains; Forward Linkages; Gains in GVCs; Participation in GVCs;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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