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Strengthening the stability of exports through GVC participation: The who and how matters

Carmen Díaz-Mora (Department of International Economics, Universidad de Castilla-La Mancha – Campus de Toledo, Toledo, Spain)
Rosario Gandoy (Department of International Economics, Universidad de Castilla-La Mancha – Campus de Toledo, Toledo, Spain)
Belen Gonzalez-Diaz (Department of International Economics, Universidad de Castilla-La Mancha – Campus de Toledo, Toledo, Spain)

Journal of Economic Studies

ISSN: 0144-3585

Article publication date: 13 August 2018

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Abstract

Purpose

Drawing on the literature that has shown the prevalence of short-lived trade relationships, the purpose of this paper is to provide further understanding about this issue by exploring the impact of engaging in Global Value Chains (GVCs) on the chance of export survival at product-country level, paying special attention to the differences between advanced and developing countries. The authors also investigate whether the type of GVC participation (backward or forward) matters for export survival.

Design/methodology/approach

To capture to what extent a country’s exports are integrated in GVCs, the authors use the OECD Inter-Country Input-Output database to estimate value added incorporated in exports. Through the estimation of a discrete-time duration model, the authors explore the impact of engaging in GVCs on export survival using highly disaggregated trade data from the CEPII’s BACI database.

Findings

The findings endorse the hypothesis that deeper participation in GVCs is a key factor in explaining stability in trade relationships, mainly for developing countries where the trade flows are especially fragile. The authors also find different effects depending on the type of GVC involvement and on whether the value chain partners are advanced or developing.

Originality/value

The paper contributes to the literature by extending the understanding on the factors that promote the stability of exports, including among them, involvement on GVCs (and its forms) which is one of the most relevant factors to explain recent behavior of trade.

Keywords

Acknowledgements

The authors of this paper has not made the authors research data set openly available. Any enquiries regarding the data set can be directed to the corresponding author.

Citation

Díaz-Mora, C., Gandoy, R. and Gonzalez-Diaz, B. (2018), "Strengthening the stability of exports through GVC participation: The who and how matters", Journal of Economic Studies, Vol. 45 No. 3, pp. 610-637. https://doi.org/10.1108/JES-04-2017-0106

Publisher

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Emerald Publishing Limited

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