IDEAS home Printed from https://ideas.repec.org/p/ris/adbewp/0329.html
   My bibliography  Save this paper

Global Value Chains and the Transmission of Business Cycle Shocks

Author

Listed:
  • Gangnes, Byron

    (University of Hawaii)

  • Ma, Alyson C.

    (University of San Diego)

  • Van Assche, Ari

    (HEC Montréal)

Abstract

The collapse of trade during the great recession of 2008–2009 has raised the question of whether the rise of global value chains (GVCs) has increased or accelerated the international transmission of business cycle shocks. In this paper, we empirically investigate two channels through which a country’s integration into GVCs may increase the income elasticity of its exports. First, GVCs may simply be concentrated in sectors that are more sensitive to external income fluctuations (composition effect). Alternatively, there may be characteristics that are inherent to GVCs that trigger a faster and more amplified propagation of business cycle shocks (supply chain effect). Using trade data from the People’s Republic of China, we find supporting evidence for the composition effect. However, we find no evidence that trade within GVCs have an intrinsically higher income elasticity than regular trade.

Suggested Citation

  • Gangnes, Byron & Ma, Alyson C. & Van Assche, Ari, 2012. "Global Value Chains and the Transmission of Business Cycle Shocks," ADB Economics Working Paper Series 329, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0329
    Note: http://www.adb.org/sites/default/files/pub/2012/economics-wp-329.pdf
    as

    Download full text from publisher

    File URL: https://www.adb.org/publications/global-value-chains-and-transmission-business-cycle-shocks
    File Function: Full text
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Byron Gangnes & Ari Van Assche, 2016. "Global Value Chains and Changing Trade Elasticities," Working Papers 201617, University of Hawaii at Manoa, Department of Economics.
    2. Wang, Zhi & Wei, Shang-Jin & Yu, Xinding & Zhu, Kunfu, 2022. "Global value chains over business cycles," Journal of International Money and Finance, Elsevier, vol. 126(C).
    3. Peter H. Egger & Jiaqing Zhu, 2022. "How COVID‐19 travels in‐ and outside of value chains and then affects the stock market: Evidence from China," The World Economy, Wiley Blackwell, vol. 45(2), pages 523-538, February.
    4. Deborah Swenson, 2014. "Changes in the production stage position of People’s Republic of China trade," Chapters, in: Benno Ferrarini & David Hummels (ed.), Asia and Global Production Networks, chapter 6, pages 179-214, Edward Elgar Publishing.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:adbewp:0329. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Orlee Velarde (email available below). General contact details of provider: https://edirc.repec.org/data/eradbph.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.