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Global value chain and growth convergence: Applied especially to China

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  • Dazhong Cheng
  • Jian Wang
  • Zhiguo Xiao

Abstract

We propose a new convergence potential indicator for standard growth convergence regressions: the global value chain (GVC) position index, measured by the contribution of high‐skilled labour in total domestic value added. Our convergence indicator can avoid the lagged dependent variable problem discussed in Barro (2015 and 2016) and deliver more accurate forecasts for China’s GDP growth than GDP per capita does. Using the GVC position index, we predict that China’s growth potential remains at 7–8% between 2010 and 2015, while the predictions using GDP per capita as the convergence potential indicator are much lower.

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  • Dazhong Cheng & Jian Wang & Zhiguo Xiao, 2021. "Global value chain and growth convergence: Applied especially to China," Pacific Economic Review, Wiley Blackwell, vol. 26(2), pages 161-182, May.
    • Handle: RePEc:bla:pacecr:v:26:y:2021:i:2:p:161-182
    DOI: 10.1111/1468-0106.12322
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    2. Rongrong Zhou & Decai Tang & Dan Da & Wenya Chen & Lin Kong & Valentina Boamah, 2022. "Research on China’s Manufacturing Industry Moving towards the Middle and High-End of the GVC Driven by Digital Economy," Sustainability, MDPI, vol. 14(13), pages 1-30, June.
    3. Yu, Hui & Li, Huiru, 2023. "How does the global metal industry value network affect industrial structure upgrading ? The perspective of industry chain," Resources Policy, Elsevier, vol. 85(PB).

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