Foreign Value Added

Global Value Chains and their Determinants: Comparative Analysis of OECD and BRICS Countries with Special Reference to Services

Abstract: 
The internationalization of the supply chain has brought a new term to the forefront known as Global Value Chains (GVCs). The reduction in trade costs, increased trade facilitation, reduction in tariffs, liberalization of domestic economy, progress in the field of ICT etc. are some of the factors that have made GVCs workable on the international platform. This paper brings out the importance of OECD and BRICS countries in GVCs as the exporter. For the purpose of the study the participation of the selected countries in GVCs has been measured and comparison is made on the following points - share of intermediate products in gross exports and imports, domestic and foreign value added content in gross exports, domestic and foreign value added content of services in gross exports, participation index, industry wise comparison with special reference to services and finally as to what the policy and non policy factors are that affect the country participation in GVCs.The major findings of the paper are as follows: the share of BRICS countries has registered an increase in the share of foreign value added content in gross exports and at the same time they are the major exporters of intermediate products in the world market. The same is true with respect to domestic and foreign value added part of services; the participation index along with backward and foreign integration index has seen an increase for BRICS.
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