Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/223075
Authors: 
Adarov, Amat
Stehrer, Robert
Year of Publication: 
2019
Series/Report no.: 
wiiw Working Paper No. 170
Abstract: 
In the age of globalisation, international trade and foreign direct investment (FDI) have become integral elements of cross-country production sharing. In this paper we empirically assess the impact of FDI, as well as capital dynamics and structure, on the formation of global value chains (GVC) and trade in value added at country and sectoral levels based on a database constructed for a sample of European countries over the period 2000-2014. The analysis reveals that inward FDI is especially conducive to the formation of backward linkages while outward FDI facilitates forward GVC participation, especially in high-tech manufacturing sectors. A particularly robust influence of FDI and capital accumulation on GVC integration is identified in the textile and clothing industry. While capital accumulation in general intensifies GVC linkages for most sectors, ICT capital appears to be especially instrumental for backward integration of electrical and transportation equipment sectors.
Subjects: 
global value chains
value added trade
foreign direct investment
capital
capitalcomposition
gravity model
fractional response model
JEL: 
F14
F15
F21
E22
Document Type: 
Working Paper

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