EconPapers    
Economics at your fingertips  
 

Reading the Footprints: How Foreign Investors Shape Countries’ Participation in Global Value Chains

Christian Buelens () and Marcel Tirpák ()
Additional contact information
Christian Buelens: European Commission
Marcel Tirpák: European Central Bank

Comparative Economic Studies, 2017, vol. 59, issue 4, 561-584

Abstract: Abstract Gravity variables play a significant role in explaining trade flows related to global value chain participation. We find evidence that cooperation costs – measured by linguistic and geographical proximity – are more relevant for trade that reflects cross-border production sharing compared to trade in final goods. Applying an augmented gravity model framework to a newly constructed dataset, we find a positive association between bilateral FDI stock and both gross bilateral trade and the bilateral import content of exports. As bilateral FDI stock affects both the volume and composition of trade flows, we conclude that foreign investors play an active role in shaping host economies’ export structure and their participation in international production networks.

Keywords: global value chains; value-added trade; foreign direct investment; gravity model; F14; F15; F21; L22 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1057/s41294-017-0036-2 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:compes:v:59:y:2017:i:4:d:10.1057_s41294-017-0036-2

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/41294/PS2

Access Statistics for this article

Comparative Economic Studies is currently edited by Josef C. Brada and Paul Wachtel

More articles in Comparative Economic Studies from Palgrave Macmillan, Association for Comparative Economic Studies Contact information at EDIRC.
Series data maintained by Sonal Shukla ().

 
Page updated 2018-02-15
Handle: RePEc:pal:compes:v:59:y:2017:i:4:d:10.1057_s41294-017-0036-2