Detecting the Position of Countries in Global Value Chains Using a Bilateral Approach

Oguzhan Erdogan

Working Papers from Research and Monetary Policy Department, Central Bank of the Republic of Turkey

Abstract: To detect the position of countries in global value chains in a consistent manner, we propose that export and import upstreamness measures of a country should be varying across its trade partners over time. To formalize our argument, we define the notion of bilateral upstreamness between any pair of countries and show how its measure is affected from country-specific factors. Moreover, we incorporate the variables in gravity literature into our estimation equations to account for how geographical factors can have an impact on their bilateral production line position. Following Antrás et al. (2012), we also consider the hypotheses tested in their paper with our more aggregated and recent data set. Similar to their results, we find that better rule of law, higher level of financial development and investment in human capital lead the export composition of countries to be more final good-oriented in international markets. Finally, we portray Turkey’s production line position in comparison with different country blocks and income groups to illustrate our bilateral analysis.

Keywords: Bilateral upstreamness; International trade; Global value chains; Production line position (search for similar items in EconPapers)
JEL-codes: F14 L14 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-ara and nep-int
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