Global Value Chains’ Participation and Logistics Performance in Post-Soviet Economies

Abstract

Abstract Post-Soviet countries have never been analysed in the global value chain (GVC) context. Therefore, in this study, we evaluate the degree of backward participation of GVCs in the manufacturing sector of post-Soviet countries. We also examine the quantitative linkage between GVCs and host countries’ logistics performance as a service-link component. We used the UNCTAD-Eora GVC database and employed a structural gravity trade model. The results illustrate a positive correlation between GVC backward participation in manufacturing and income levels in the post-Soviet economies. The empirical estimation using the structural gravity trade model demonstrates a quantitative linkage between GVC backward participation and the logistics performance of the host country. The level of logistics performance accounts for 70–80 percent of the degree of GVC backward participation. Our findings’ major policy implication is that post-Soviet economies’ logistics performance should be improved by erasing the Soviet era’s negative legacy. JEL Codes: F12, F13, F14, O57. Keywords: Global value chains, Logistics performance, Post-Soviet countries, Manufacturing, Structural gravity trade model.