Does GVC Participation Enhance Economic Performance? Evidence from the Turkish Manufacturing Sector

Ali Benli and Özgür Tonus

Journal of Research in Economics, Politics & Finance, 2025, vol. 10, issue 2, 728-757

Abstract: This study investigates the potential economic gains for the Turkish economy from increased participation in Global Value Chains (GVCs). Participation in GVCs enables more specialized production processes, enhancing economic efficiency and leading to increased exports, value added, and employment. This study uses the CS-ARDL method through a triple regression model to estimate the effects of forward and backward GVC participation on exports, the influence of increases in exports on the share of domestic value-added in exports, and the effects of export-driven domestic value-added on employment. The research employs OECD's Trade in Value Added (TiVA) data covering the period 1995-2020 and 17 manufacturing sub-sectors of Türkiye. Findings indicate that both forward and backward participation in GVCs positively influence export performance. Increases in exports decrease the share of domestic value-added while increasing the share of foreign value-added in exports, suggesting high foreign input dependency in Türkiye's exports. Although the share of domestic value-added in exports decreases, its overall size still increases. Rises in domestic value-added also increase employment. The research shows that policies aimed at Türkiye's deeper integration into GVCs can support exports and employment.

Keywords: Global Value Chains; Production Fragmentation; Trade in Value-Added; CS-ARDL (search for similar items in EconPapers)
JEL-codes: F12 F13 F14 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ahs:journl:v:10:y:2025:i:2:p:728-757

DOI: 10.30784/epfad.1667010

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