This paper adopts the production decomposition developed by Wang et al. (2017) and data from the World Input-Output Database (WIOD) to estimate the degrees of forward and backward participation in global value chains (GVCs) in 2000-2014 by the world’s major economies including China, and to do an empirical examination on the impact that heterogeneous forms of participation in GVCs have on the improvement of GVCs. The results show that forward participation in GVCs helps increase the sophistication of exports, while backward participation in GVCs exerts different infl uence on the sophistication of exports. While a lower level of backward participation by a country is constrained by the country’s current position in the international division of labor and thus does not help increase the sophistication of its exports, a higher level of backward participation helps break through the bottleneck of low-end locking in GVCs and increase the sophistication of exports.
Keywords: global value chain (GVC), technological sophistication of exports, production decomposition model
China Finance and Economic Review
Volume 8 Number 3 Autumn 2019.P22