Inter-and intra-Asian regional value chains: Identifying country characteristics

Abstract

Based on the decomposition of trade-related production activities in the global value chain, we analyze the characteristics of Asian countries from inter- and intra- Asian regional value chain (ARVC) perspectives between 2009 and 2019. Then, we investigate how Asian countries’ inter- and intra-ARVC positions influence their gross output in the global value chain. The results illustrate that the inter-ARVC position is positively correlated to the gross output for countries with large economies of scale. Furthermore, the inter-ARVC position is employed as the threshold variable to evaluate Asian countries’ performance in the intra-ARVC. When their inter-ARVC position is below the threshold value, increasing the intra-ARVC position cannot increase their gross output for all Asian countries. Countries with large economies of scale could benefit through intra-ARVC with a higher threshold value of inter-ARVC position compared with countries with small economies of scale.

KEYWORDS:

• Global value chain
• global value chain position
• Asian regional value chain
• trade-related production activities
• threshold regression

JEL Classifications:

• D57
• D5
• DD
• F02
• F
• F18
• F1

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Notes

1 Asian countries are listed in Appendix 1.

2 We sort out the trade-related production activities in inter- and intra-ARVC based on the nearest production linkage between sectors. For instance, for the trade activities in intra-ARVC from observed country r to Asian country s, it may include the implicit foreign value-added in imports from both Asian country t and non-Asian country t’ to country r before the trade from r to s. Based on the nearest production linkage, we define the above trading activities as trade-related production activities in the intra-ARVC neglecting the iterated trade activities. Another example for the imports: If observed country r imports product in inter-ARVC from non-Asian country t’. In the trade from t’ to r, it might contain the implicit value-added from Asian country s or non-Asian country s’ to non-Asian country t’. We define this trade activities as trade in inter-ARVC without considering the source of the imports from non-Asian country t’ to r.

3 Asian countries are listed in Appendix 1.

4 To maintain the consistency, we choose Consumer Price Index indicator, published by World Bank to adjust the price level.

5 The most favored nation is a policy to exempt the product’s tariff from the least-developed countries

6 I denotes an Asian country that excludes country R.

7 I’ denotes a non-Asian country that excludes country T’.

8 I denotes an Asian country that excludes country R.

9 I’ denotes a non-Asian country that excludes country T’.

Additional information

Funding

This work was supported by National Natural Science Foundation of China (Grant number: 71963022, 71863022); the Foundation of Education Department of Yunnan Province (Social Science) (Grant number: 2018JS122); the Applied Basic Research Foundation of Yunnan Province (Grant number: 2020FD042).