GVC participation
Also called: Backward and forward participation · Topic: Globalisation and MNCs · NCERT: Beyond NCERT
Meaning
A global value chain (GVC) is production split into stages spread across countries, with each stage adding value. GVC participation measures how far a country is part of such chains. It has two parts:
- Backward participation: the foreign value added in a country's own exports, which comes from imported inputs.
- Forward participation: the country's own domestic value added that is used in other countries' exports.
Value-added data (from OECD TiVA and ADB MRIO tables) matter because gross export figures count inputs twice when they cross borders many times.
Example
India's smartphone exports use imported chips and displays. That is backward participation. Indian software built into another country's exports is forward participation.
Don't confuse with
- Gross exports: the total value of exports, including imported inputs. They overstate how much value a country actually adds.