Interactions Between Global Value Chains and Foreign Direct Investment: A Network Approach

By: Adarov, Amat.

Material type: materialTypeLabel

BookSeries: wiiw Working Papers: 204Publisher: Wien : Wiener Institut für Internationale Wirtschaftsvergleiche (wiiw), 2021Description: 29 S., 4 Tables and 8 Figures, 30cm.Subject(s): global value chains | foreign direct investment | network analysis | cross-border connectivity | simultaneous equation modelCountries covered: Global samplewiiw Research Areas: Macroeconomic Analysis and Policy | International Trade, Competitiveness and FDIClassification: F10 | F14 | F15 | F21 Online resources: Click here to access online Summary: The world economy is increasingly shaped by cross-border production and investment activity. The paper uses complex network analysis along with panel data econometric techniques to study the structure and interactions between the networks of global value chains (GVC) and foreign direct investment (FDI). The analysis reveals that both FDI and GVC networks have a distinct core-periphery structure dominated by a relatively small number of countries with the USA constituting the global hub interlinked with regional European and Asian clusters, which, in turn, are centered around regional hub countries like China and Germany. Simultaneous equation model regressions using three-stage least squares suggest that FDI centrality facilitates GVC centrality of countries. However, FDI centrality is driven to a large extent by the FDI statutory restrictions and tax oﬀshore regulations, rather than GVC connectivity.

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Item type	Current library	Call number	Status	Date due	Barcode
Paper	WIIW Library	5.700/204 (Browse shelf(Opens below))	Available		1000010005876

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The world economy is increasingly shaped by cross-border production and investment activity. The paper uses complex network analysis along with panel data econometric techniques to study the structure and interactions between the networks of global value chains (GVC) and foreign direct investment (FDI). The analysis reveals that both FDI and GVC networks have a distinct core-periphery structure dominated by a relatively small number of countries with the USA constituting the global hub interlinked with regional European and Asian clusters, which, in turn, are centered around regional hub countries like China and Germany. Simultaneous equation model regressions using three-stage least squares suggest that FDI centrality facilitates GVC centrality of countries. However, FDI centrality is driven to a large extent by the FDI statutory restrictions and tax oﬀshore regulations, rather than GVC connectivity.

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