Do Global Value Chains Amplify Global Imbalances?
Antonia López-Villavicencio and
Valérie Mignon ()
Authors registered in the RePEc Author Service: Antonia López Villavicencio ()
Working Papers from CEPII research center
This paper addresses the impact of countries' participation in global value chains (GVCs) on their current account balances. Relying on a panel of 57 advanced and emerging countries, we do not fi nd evidence that GVC participation directly raises economies' current account positions. On the contrary, we show that backward participation makes a negative contribution to current account balances: our results contradict the speculation that current account imbalances of downstream countries are likely to benefi t more from GVC participation than economies which are located further upstream. Moreover, we show that there is no signifi cant indirect effect of GVC on the current account operating through the exchange rate. Finally, our fi ndings indicate that whereas GVC participation boosts exports, this increase is not accompanied by improvements in price competitiveness, nor by higher levels of saving rates.
Keywords: Global Value Chains; Current Account Imbalances (search for similar items in EconPapers)
JEL-codes: F32 F40 F62 (search for similar items in EconPapers)
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Working Paper: Do global value chains amplify global imbalances? (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:cii:cepidt:2018-13
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