Seminar on ‘Measuring Participation in Global Value Chains: A Macro Level Approach’
A seminar on ‘Measuring Participation in Global Value Chains: A Macro Level Approach’ was held at the Joan Robinson Hall on January 24, 2020. The seminar was presented by Dr. Vinoj Abraham, Associate Professor, CDS and Mr Manikantha Nataraj, Doctoral Scholar, CDS. Dr Srikanta Kundu, Assistant Professor, CDS chaired the seminar.
Abstract: Over time the nature of global trade has undergone paradigm shift from inter-industry trade to inter firm trade to trade via global vale chains (GVC). This paper ventures on to measure the degree of participation in GVC at the macro level as defined by Johnson (2018).The existing measurement of GVC integration, the Participation Index (PI) (Koopman, Wang, & Wei, 2014), is not comprehensive as it does not consider some vital indicators of trade in value added terms. The Participation Index focuses on those indicators which will always reflect trade via GVC. There are other indicators which reflect GVC activities also along with simple trade activities, which are left out in the PI. In this paper, the authors, create a new Modified Participation Index (MPI) by considering all those indicators which can reflect trade via GVC. The weights are constructed in order to capture the potentiality of each indicator to reflect the GVC oriented trade exclusively. Then the paper shifts its focus on comparing MPI and PI. In order to do so, the MPI is decomposed into its PI part and Non-PI part. Then, by using the OECD-TiVA (2016, 2018) database for OECD and BRICS countries for five time points, 1990, 2000, 2005, 2010 and 2015, the PI, MPI, and the decomposed parts of the MPI are calculated and analysed. The author finds that the global average of Non-PI part of MPI is significantly different from zero, but the global variance of the Non-PI-part is not significantly different from zero. Hence the ordering of the levels of MPI as well as the over-time change in it, are significantly different from that of PI but the direction of change of MPI is dominated by the PI-partand as a consequence, the direction of change in both PI and MPI is remaining unaltered.