Do backward and forward participation in global value chain matter for competitiveness? A dynamic panel analysis

This paper examines how high-technology global value chain (GVC) integration affects national competitiveness across 11 Asia-Pacific economies from 1995–2022. Using OECD TiVA data and a dynamic pooled mean group estimator, the analysis evaluates total GVC participation and its forward and backward participation components. The results confirm a stable long-run equilibrium relationship between GVC integration and competitiveness. Forward participation exerts the strongest positive effect, followed by backward participation, indicating that upstream, knowledge-intensive positioning generates greater value capture and resilience. Capital accumulation and governance quality significantly enhance competitiveness, while technological distance and foreign direct investment (FDI) show weaker or negative effects. Crisis extensions incorporating the Asian Financial Crisis, Global Financial Crisis, and COVID-19 demonstrate asymmetric impacts, yet the long-run GVC–competitiveness relationship remains intact. The findings suggest that upgrading into high-value segments, supported by strong domestic capabilities, is essential for sustaining long-term competitiveness in the Asia-Pacific region.

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