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The FDI Network, Global Value Chain Participation and Economic Upgrading

Cover_222_PSU_FDI and GVC Transformation
Published Date May 2022
Type of Publication Reports
Publication Under APEC Secretariat, APEC Policy Support Unit
Accessed 2062
Pages 17
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Foreign direct investment (FDI) represents one of the important internationalisation pathways to global value chain (GVC) participation. This policy brief contributes to the discussions by focusing on three East Asian developing economies – China; Indonesia; Viet Nam – with varying levels of GVC participation and upgrading.

The paper starts with an analysis of bilateral FDI networks using the (social) network analysis framework, and, in particular, centrality measures. An analysis of the economic structures of China; Indonesia; and Viet Nam will follow, to understand their industrial base and economic diversity. Skyline analysis will be employed to provide insights into their domestic self-sufficiency in production capacity as well as their industrial structure. The paper will go on to explore trends in GVC participation and positioning in the textile, electronics and automobile sectors for the three economies. It ends with a brief analysis of the impact on sales, employment and productivity from GVCs and FDI.