Does Global Value Chain Integration Enhance Export Competitiveness? Evidence from Indonesia’s Industry-Level Analysis

Bhushan Praveen Jangam, Badri Rath and Masagus M Ridhwan

Emerging Markets Finance and Trade, 2024, vol. 60, issue 7, 1578-1598

Abstract: We investigate the association between global value chain (GVC) integration and export competitiveness for 34 Indonesian industries from 2007 to 2020. Using panel unit root, panel cointegration, panel long-run estimator, and panel granger causality, we find the following key findings: First, we find that GVC integration and export competitiveness are cointegrated or share a long-term association. Second, we find that GVC integration favorably impacts export competitiveness over time. Third, we confirm the existence of a unidirectional causal link between GVC integration and export competitiveness. Fourth, we also discover results linked with the kind of GVC integration (forward, backward, and two-sided) and the industry type (manufacturing, services, labor-intensive and capital-intensive industries). These findings aid policymakers in the formulation of suitable measures to enhance GVC integration to strengthen the export competitiveness of Indonesian industries.

Date: 2024
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DOI: 10.1080/1540496X.2023.2284304

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