Abstract
This article addresses issues on the degree of participation in global value chains (GVCs) for emerging economies in the Association of Southeast Asian Nations (ASEAN). The main research question is whether there is a linkage between GVC backward participation, that is, vertical trade defined as the foreign value embedded in exports and logistics performance as a component of service links in the host country. The major contributions of this study are the usage of the UNCTAD-Eora Global Value Chain Database for describing vertical trade and the application of a “structural” gravity model setting for the specification of estimated equations. The statistical observations demonstrate that GVC backward participation in emerging ASEAN economies made substantial progress during the 1990s with per capita GDP growth, and a large gap occurred in the degree of GVC backward participation between forerunners and latecomers in the ASEAN economies. Empirical estimation can also identify a quantitative linkage between GVC backward participation and logistics performance in the host country.
Highlights
This article attempts to address issues on the degree of participation in global value chains (GVCs) of emerging economies in the Association of Southeast Asian Nations (ASEAN) and its linkage with host economies’ logistics performance.GVCs have been a trend in global economic activities over the past two decades and have been one of the prominent analytical targets for intensive theoretical and empirical studies in academic circles
This study focuses on the backward participation measured by the “foreign value embedded in a country’s exports,” because this study targets emerging ASEAN economies, which depend on foreign inputs for their exports and have less capacity to contribute to the third countries’ exports in their GVC participation process
This article attempted to address the issue on the degree of GVC backward participation for emerging ASEAN economies, and the specific research question was whether there is a linkage between the GVC backward participation, namely, vertical trade defined as the foreign value embedded in exports, and the logistics performance as a component of the service links in the host country
Summary
The research question in this study is as follows: is there a linkage between GVC backward participation (vertical trade defined as foreign value embedded in exports) and the logistics performance in the host country (as a component of the service links) in emerging ASEAN economies? The foreign value added in exports in this study measure vertical trade but are not confined to the “intra-industry” trade that characterizes the fragmentation, because the foreign value contains raw materials and services that manufacturing companies usually import. Both indicators might have pros and cons and adding the value-added indicator might contribute to enriching the evidence.
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