TITLE:
The Heterogeneous Effects of Trade Agreements on Global Value Chain Participation: Who Specializes Matters!
AUTHORS:
Huibing Cheng, Hong He, Yuanjiang Cai, Shanshui Zheng
KEYWORDS:
Trade Agreements (TAs), Global Value Chain (GVC) Participation, Heterogeneous Effects
JOURNAL NAME:
Open Journal of Business and Management,
Vol.11 No.6,
November
10,
2023
ABSTRACT: Using
difference-in-differences (DID) estimation technique on data, which covers 43 countries over the 2005-2014 period, we examine the impact of trade
agreements (TA) on bilateral global value chain (GVC) participation. Empirical
estimation results show that TAs between member
countries with different levels of economic development are more likely to promote bilateral GVC
participation. Moreover, the
effects of TAs on bilateral GVC participation levels are heterogeneous across
member countries. Specifically, TAs have a higher impact on forward GVC
participation of developed member countries than that of developing member
countries but the effect on backward GVC participation of developed member
countries is smaller than that of developing member countries. Finally, the
heterogeneous effect is larger in size in the case of deep TAs. This study not
only enriches the literature on the relationship between trade agreements and bilateral GVC participation but also provides a new
idea for economies to promote bilateral GVC participation.