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BOK Working Paper No.2020-12, Effects of Global Value Chains on Economic Growth and Their Changes after Global Financial Crisis

Economic Research Institute (82-2-759-5540) 2020.05.28 1854

Title : Effects of Global Value Chains on Economic Growth and Their Changes after Global Financial Crisis

Author : Sei-Wan Kim(Ewha Womans University), Moon Jung Choi(BOK)

<Abstract>

This paper empirically investigates the effects of the global value chains (GVC) on economic growth using the World Input-Output Database with 43 countries for the period of 2000-2014. As the GVC has weakened since the global financial crisis, we particularly focus on post-crisis changes in the effects of forward and backward participation in the GVC on economic growth. In addition, we compare the effects on the manufacturing and service sectors, and also compare the effects for advanced and emerging economies. The results from our panel regression analysis show that the economic growth effects of GVC participation have changed significantly since the crisis. Specifically, the forward GVC participation effects for the manufacturing sector and for emerging economies increased in the post-crisis period. However, the GVC participation effects for the service sector and for advanced economies became insignificant after the crisis.

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