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Unpacking the Linkages Between Industrial Position in Global Value Chains and Sustainable Economic Growth

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  • Josephine Wuri

    (Department of Economics, Faculty of Economics, Sanata Dharma University, Yogyakarta 55281, Indonesia)

  • Lukas Purwoto

    (Department of Management, Faculty of Economics, Sanata Dharma University; Yogyakarta 55281, Indonesia)

  • Yuliana Rini Hardanti

    (Department of Economics, Faculty of Economics, Sanata Dharma University, Yogyakarta 55281, Indonesia)

  • Laurentius Bambang Harnoto

    (Department of Economics, Faculty of Economics, Sanata Dharma University, Yogyakarta 55281, Indonesia)

  • Maria Griselda Delwella Papur

    (Department of Economics, Faculty of Economics, Sanata Dharma University, Yogyakarta 55281, Indonesia)

Abstract

Global economic developments are currently facing economic fluctuations and the climate change crisis, which demand a development approach that integrates growth with environmental sustainability. Although participation in Global Value Chains (GVCs) has become the backbone of the global economy, many countries, including Indonesia and most ASEAN countries, are still in upstream positions with high carbon intensity and low added value. This condition hinders sustainable economic growth and contributes to increased global emissions. This study aims to analyze how the position of the industrial sector in the GVCs can drive sustainable green economic growth. Using data from five ASEAN countries for the 2010–2023 period, this study employed the Generalized Method of Moments (GMMs) dynamic panel model to address the issues of endogeneity and individual heterogeneity. The results show that movements to upstream positions in GVCs, FDI, and political stability have a significant and positive impact on green economic growth. These findings highlight the need for tailored policies to encourage the development of green industries and improve global competitiveness.

Suggested Citation

  • Josephine Wuri & Lukas Purwoto & Yuliana Rini Hardanti & Laurentius Bambang Harnoto & Maria Griselda Delwella Papur, 2025. "Unpacking the Linkages Between Industrial Position in Global Value Chains and Sustainable Economic Growth," Sustainability, MDPI, vol. 17(23), pages 1-17, November.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:23:p:10629-:d:1804170
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