Global value chains assessment in the 2000s : an approach with income transfers

Abstract

In this paper, we make use of recent data published by the World Input-Output Database to (i) measure the degree of total and net “transferred” gains of major Organization for Economic Co-operation and Development (OECD)-member countries and emerging economies by being part of a Global Value Chain (GVC) with two incomerelated indicators built for this purpose and (ii) capture whether the bilateral degree of GVC insertion of this group of countries, measured with the proposed indicators, contributes to Foreign Direct Investment (FDI) inflows in the 2000s. The pooled regression model estimated shows that bilateral FDI inflows, controlling for other possible FDI determinants, are positively associated to the total “transferred” income generated by GVC-induced bilateral trade of inputs, taken as a proxy to the degree of GVC-embeddedness of those countries, while correlation with GVC-associated net gains was not confirmed. The regression also shows the negative impact of the global financial crisis of 2008-9 and the significant role played by the People’s Republic of China on FDI inflows