Speed of convergence in global value chains: Forward or backward linkage

The COVID-19 pandemic is creating uncertainty that potentially causes a decline in global trade. It hampers the catching-up processes of developing countries because they are already connected through value chains (GVCs). This study investigates speed convergence GVC participation. Furthermore, we propose forward and backward participation approach to trace domestic foreign value-added contributions overcome overvaluation gross exports. We compare linkages determine countries’ speeds. scrutinize stochastic, σ, β-convergence using system generalized method moments; additionally, use this address potential endogeneity issues. Using dynamic panel approach, investigate GVCs possible direct investment (FDI) factors may influence convergence. In addition, analyze early effect on rate recent Asian Development Bank multi-regional input-output database covers period 2010–2019. results illustrate both participation; however, varies among group countries. A comprising Association Southeast Nations other experiences faster than advanced contrast, experience reveal FDI plays significant role Overall, has decreased average.