The Significance of Participation in the Global Production Network to Economic Development: An Econometric Analysis of BRICS+T Countries

Authors : Şahin Nas, Seyit Ali Miçooğullari, Maya Moalla

Pages : 101-116

Doi:10.21121/eab.1194774

View : 135 | Download : 95

Publication Date : 2024-02-03

Article Type : Research Paper

Abstract :With globalization, the international fragmentation of production (IFP) splits the production process of final goods and services into several stages undertaken in different countries integrated into global production networks. BRICS + T countries have rapidly participated in the (IFP) process especially after 2000s. The main purpose of this paper is to analyze the nexus between BRICS+T countries’ participation in the global production networks and their economic development. The vertical specialization rate, as an indicator of this participation, had been calculated utilizing OECD Input-Output Tables. Subsequently, the development index was calculated utilizing economic-technological and cultural-institutional indicators published by World Bank. The vertical specialization’s impact on development was estimated utilizing the CS-ARDL estimator. The results revealed that while the vertical specialization has a statistically significant positive impact on development in the short term, a positive but not statistically significant impact was recorded in the long term. Konya (2006) causality test was performed to examine the causal relationship among the selected variables. The results revealed a one-way causality running from development to vertical specialization in China and Turkey and a one-way causality running from vertical specialization to development in Brazil. No causality relationship could be detected in other countries included in the analysis.
Keywords : Economic Development, Vertical Specialization, Globalization, Input Output Models, BRICS T, CS ARDL