Heterogeneous Effects of Global Value Chain Participation on Economic Growth: An Empirical Study of Fifteen Asian Countries

Abstract

Based on panel data from 15 Asian countries from 2001 to 2022, this study examines the impact of global value chain (GVC) participation on economic growth from a value-added trade perspective. Using data from OECD-TiVA and the WDI, this paper constructs indicators of overall, forward, and backward GVC participation and estimates their effects with a two-way fixed effects model. The results show that overall GVC participation has a significant negative effect on economic growth. After further decomposition, forward participation exhibits a more significant and robust negative effect, while backward participation does not show stable significance in the baseline regression. Heterogeneity analysis indicates that the growth effect of GVC participation varies across stages: it shows some growth-promoting effects in the low-participation group, whereas negative effects are more pronounced in the high-participation and high-capital-formation groups. Mechanism tests suggest that trade openness and import openness have certain dynamic explanatory power, as their one-period lagged values both exert positive effects on economic growth. The findings suggest that deeper GVC participation does not necessarily lead to better growth outcomes; rather, its growth effect depends on the mode of integration, position in the division of labor, and domestic capacity for value creation.