Trade Facilitation and GVC Participation：An Analysis Based on the World Input-Output Database

Abstract

Under the background of economic anti-globalization and the escalation of Sino-US trade frictions, it is particularly important to continue to promote trade facilitation. From the hard environment” of trade facilitation, the construction of infrastructure such as transportation can reduce transaction costs, reduce the uncertainty of the trading cycle, make the order, stocking and shipping cycle more predictable, and greatly shorten the export side and the distance of the final demand of the host country. From the soft environment” of trade facilitation, the red tape” in the trade process has caused incalculable losses to the value of the product. The effect of trade facilitation has been confirmed by many scholars, but the research about the effect of trade facilitation on GVC participation is rare.From the perspective of research, this paper focuses on the GVC participation effect of trade facilitation from the perspective of national heterogeneity, industry heterogeneity and regional value chains, and finally draws a more policy-meaningful conclusion.This paper uses the entropy method and the KWW expansion method to measure the degree of trade facilitation and participation, and uses the OLS and the two-stage OLS to conduct empirical tests. The raw data for the core explanatory variables in this paper is derived from the World Input-Output Database（WIOD）. The main explanatory variables are from World Bank data and the WEF database.The main conclusions are as follows: firstly, trade facilitation enhances the depth of a country’s GVC participation; secondly, trade facilitation has a structural impact on GVC participation. Compared with the hard environment” of trade facilitation, the current improvement of the soft environment” of trade facilitation has a more prominent effect on GVC participation, especially in developing countries. From the perspective of industry heterogeneity, the impact of trade facilitation on GVC participation in sectors with higher asset specificity is more obvious. From the perspective of regional value chains, trade facilitation inhibits the regional fragmentation” of value chains and promotes the formation of GVCs.Therefore, we should take the enforcement of the Bali Agreement on Trade Facilitation as a chance to improve the border management, trying to establish a single window”, promote paperless, automated and intelligent customs clearance, and improve the response speed of the international production division chain. Meanwhile, we should improve the business environment by effectively reducing the cost of compliance in international trade, accelerating intermediary flows, and optimizing the allocation of resources. At last, we should speed up the negotiation of WTO cross-border electricity suppliers, formulate multilateral rules for cross-border electricity providers, and cultivate new trade formats in the GVC system, so as to deepen the division of work in GVCs.