Global Value Chains and Poverty: A Random Effects Approach to ASEAN and OECD Comparisons

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Jirayut Monjagapate
Yuwapak Leelasribunjong

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There has been a lot of debate on the effects of participating in GVCs and poverty, the relationship between developed and developing countries. This study endeavors to enhance comprehension regarding the nexus linking GVC involvement and poverty levels, dissecting GVC participation into two components: This is in addition to forward and backward participation. Further, it aims to examine the role of education, with education being disaggregated into literacy levels in the context of the relationship between GVC participation and poverty levels in both OECD and ASEAN regions. Using Random Effects regression of panel data covering 26 countries over the period 1995 to 2018 confirms that forward participation has a mixed effect on poverty depending on the country categories and their education level. On the other hand, backward participation shows a tendency of reducing poverty level in ASEAN countries.

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