THE DETERMINANTS OF CONVENTIONAL EXPORTS AND GLOBAL VALUE CHAINS: A PANEL ANALYSIS

Abstract

The main goal of this study is to investigate empirically the performance
and differences of conventional exports and exports related to the Global Value Chains
(GVC) in response two determinants: i) exchange rate in three concepts (level, volatility
and misalignment); ii) and income effect; besides the consequences of the international
financial crisis. For this purpose, three static and dynamic panel data methods were
used for a set of 59 countries, from 2000 to 2011. The results of the estimates confirm:
a) the price elasticity of exports related to GVC are higher than the price elasticity of
conventional exports; b) the increase in exchange rate volatility has lower or no impact
on exports linked to the GVC; c) countries with larger backward participations in GVC are subject to lesser effects of a currency misalignment. Subprime crisis generated more
prominent negative effects on the exports associated with the GVC than traditional exports.