• Korea Trade Review
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• v.44 no.2
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• pp.269-282
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• 2019

This study analyzes the effects of participation in the global production network on the income inequality using panel data from 2005 to 2016 for 63 countries. In this study were used fixed effects model with autocorrelation, random effect model with autocorrelation and the GLS method. Results are as follows: First, the economic development level supports the Kuznets hypothesis. And then, the forward participation in global value chains increased income inequality, and the backward participation decreased income inequality. In order to derive more detailed estimation results, we analyzed OECD countries and non-OECD countries. First, OECD countries featured decreased, but increased beyond a certain level as a U-shaped curve, that did not support the Kuznets hypothesis. In contrast, non-OECD countries followed the Kuznets U-curve. Second, participation in the global production network showed that both OECD and non-OECD countries featured increased income inequality. In contrast, backward participation appears to mitigate income inequality both in OECD and non-OECD countries. Finally, the ratio of labor and capital is significant in mitigating income inequality in non-OECD countries in which they feature backward participation in production networks. This can be interpreted as developing economies participate in the global production network due to increased capital accumulation and increased the labor productivity.

• Journal of Korea Trade
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• v.26 no.6
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• pp.96-117
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• 2022

Purpose - Considering the recent instability of world economy and its heavy dependence on foreign, Korea must formulate breakthrough approaches to proactively cope with these adverse global developments. As such, this study aims to ascertain how participation in global value chains (GVCs) relates to corporate productivity and derive policy implications. Design/methodology - This study utilizes the microdata of Korean manufacturers to develop indicators of GVC participation at the enterprise level and analyzes the effects of GVC participation on the firm's total factor productivity by using fixed effect model. Findings - Enterprises with highest rates of export-side GVC participation see their productivity grow as their export-side GVC participation rates increase. In addition, when companies are classified by their export-side GVC participation rates, increasing export values improves all firm's productivity. In particular, those with low participation rates are analyzed to achieve higher productivity by increasing their imports, not only exports, which implies that companies with lower export-side GVC participation can boost productivity by reinforcing their export and import activities. Originality/value - This research paper distinguishes itself from others in that it makes a novel attempt to design the indicators of GVC participation at the enterprise level, not at the national or industry level. In addition, this study contributes to the existing literature by dividing companies into subgroups depending on their GVC participation rates for each of export and import and identifying variances in the effect of GVC participation on productivity growth among subgroups.

• International Area Studies Review
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• v.21 no.4
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• pp.101-124
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• 2017

This study is to examine the current situation of the AEC (ASEAN Economic Community) and analyze macroeconomic situation of Vietnam since the launch of AEC. According to recent trade indicators, Vietnam is expected to be more productive in the manufacturing and processing sectors because it is at the heart of the global value chains (GVCs) in electronics, telephones, and textiles and shoes industry. Vietnam has signed or is negotiating free trade agreements with various countries around the world including Korea, Israel, EU and RCEP and so on. Therefore, it is expected that Vietnam's trade dependency and FDI inflows to Vietnam increase more and more. However, the fact that the proportion of exports by foreign-invested companies accounts for about 70% of the total exports implies the uncertainty of Vietnam's economy in the future. Attracting FDI investment can further reduce the competitiveness of domestic companies in Vietnam. Therefore, in order for Vietnam to maintain sustainable development in the future, it is necessary to reform the momentum of foreign-invested enterprises to the development of Vietnamese companies.