The participation of Southeast Asia countries in Global value chains: How is it going?

Global value chains (GVCs) emerged and generated priceless opportunities for developing countries over the last two decades. As one of the regions with the fastest economic growth rate, Southeast Asia countries has not undoubtedly fall out of GVCs phenomenon. However, little is known emperically about the extent to which ASEAN countries integrate in GVCs. Thus, this paper looks at the participation of ASEAN countries in GVCs, in terms of participation level, participation patterns and its related policies. Ultilizing the OECD-WTO database on Trade in Value Added (2013) to compute the GVCs participation index, the paper shows that Southeast Asia countries have been highly involved in GVCs. Nevertheless, the participation patterns are diversed across ASEAN countries, meaning that not all countries engage in the same path and reap the same benefits. It is also found that ASEAN's Backward linkages in GVCs (foreign value added in gross exports of a country) seem to dominate Forward linkages (domestic value added embodied in other countries' exports of a country). Examining critical indicators, the paper argues that value chains in ASEAN tend to be regionalized, rather than globalized. In addition, some factors determining GVCs participation of ASEAN countries are defined, including country specific characteristics, policy factors, and FDI inflow (Foreign Direct Investment). The paper finishes with recommended policies for ASEAN countries to capture more value from GVCs, and to accelerate thier positions in GVCs.