Global Value Chain Integration and Business Cycle Synchronisation: Evidence from Selected ASEAN Countries
Date:
16 February 2024Category:
TradeType:
Discussion PapersTags:
Trade, Global Value Chain, ASEANPrint Article:
This study examines the relationship between global value chain (GVC) integration and business cycle synchronisation in selected Association of Southeast Asian Nations (ASEAN) countries from 2007 to 2021. Using a panel fixed effects approach, we discover the following key findings: First, we find that GVC integration is associated with both output synchronisation and desynchronisation in ASEAN countries. Second, we notice that the outcomes differ depending on the type of GVC integration, such as forward integration, backward integration, or two-sided integration. Third, for a more in-depth understanding, we conduct an industry-specific analysis. We examine three major industry categories: manufacturing, services, and high-technology industries. The findings show mixed evidence of an association between GVC integration and BCS in these industries. The findings highlight the shock transmission associated with GVC integration.
