Abstract
Amid rising geopolitical tensions, the expansion of global trade and production networks has significantly amplified the co-movement of economic fluctuations. This study examines the impact of global value chain (GVC) participation on export volatility by analyzing panel data covering 1995 to 2020 across 74 countries. Using a novel econometric model, we isolate the effects of forward and backward GVC engagement and their interactions, enriching the analysis by reviewing factors previously identified as influencing export volatility. These findings illustrate that forward GVC participation exacerbates export volatility, whereas backward GVC engagement has no statistically significant effect. However, the interaction between forward and backward participation significantly diminishes export volatility. This nuanced understanding of the effects of GVC participation offers significant insights into enhancing export stability through diversified GVC integration, thereby contributing valuable perspectives to the field of international economics on the complexity of global trade dynamics and the crucial role of strategic GVC engagement in building resilient economies.
JEL Code: F10, F14, F62