Global value chains’ participation and logistics performance: the case of post-Soviet economies

This study evaluates the degree of global value chains (GVC)’ backward participation in manufacturing in the post-Soviet countries, and to examine its quantitative linkage with host countries’ logistics performances as a component of the service link. This study’s major contributions are to target the post-Soviet countries that has never been discussed in the context of GVC analyses, to use the UNCTAD-Eora Global Value Chain database, and to applies a structural gravity trade model setting. The statistical observations presented a positive correlation between GVC backward participation in manufacturing and income level in the post-Soviet economies. The empirical estimation by the structural gravity trade model identified the quantitative linkage between GVC backward participation and the logistics performance of the host country, and also demonstrated that the level of logistics performance accounts for 70 – 80 percent of the degree of GVC backward participation. The policy implication of this study is that there should still be a policy space for the post-Soviet economies to improve their logistics performances by removing a negative legacy from the Soviet Union.