Global Value Chain Integration and Business Cycle Synchronisation: Evidence from Selected ASEAN Countries

Bhushan Praveen Jangam and Badri Rath
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Bhushan Praveen Jangam: School of Management and Entrepreneurship, Indian Institute of Technology Jodhpur, India

No DP-2023-28, Working Papers from Economic Research Institute for ASEAN and East Asia (ERIA)

Abstract: This study examines the relationship between global value chain (GVC) integration and business cycle synchronisation in selected Association of Southeast Asian Nations (ASEAN) countries from 2007 to 2021. Using a panel fixed effects approach, we discover the following key findings: First, we find that GVC integration is associated with both output synchronisation and desynchronisation in ASEAN countries. Second, we notice that the outcomes differ depending on the type of GVC integration, such as forward integration, backward integration, or two-sided integration. Third, for a more in-depth understanding, we conduct an industry-specific analysis. We examine three major industry categories: manufacturing, services, and high-technology industries. The findings show mixed evidence of an association between GVC integration and BCS in these industries. The findings highlight the shock transmission associated with GVC integration.

Keywords: Global value chains; Business cycle synchronisation; Fixed effects; Industries; ASEAN (search for similar items in EconPapers)
JEL-codes: C5 F1 L6 L8 (search for similar items in EconPapers)
Date: 2024-02-16
New Economics Papers: this item is included in nep-dev, nep-int and nep-sea
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