Cross-border Direct Investment and GVC Measurement
Prof. Zhi WANG
Research professor
Schar School of Policy and Government
George Mason University
Date: 18 November 2024 (Monday)
Time: 10:30 to 12:00
Venue: E22-G008
Host: Prof. Leona Shao Zhi LI, Assistant Professor in Business Economics
Abstract
This paper applies the production activity decomposition framework proposed by Wang et al. (2021, 2022), which incorporates the role of Foreign-Invested Enterprises (FIEs), to the 2023 OECD AMNE data. We identify and quantify various GVC production activities—those related to trade, foreign direct investment (FDI), and both for 41 industries and 77 economies from 2000- 2020. We find that: (1) FDI-related GVC activities, previously uncounted in frameworks that do not distinguish domestic and foreign invested firms, account for about half of total global GVC activities, with an even larger share in high-income countries and high-tech sectors; (2) Over the past two decades, the relative importance of FIEs in GVC participation—as both suppliers and users—has markedly increased across most countries; (3) While GVC-related production activities exhibit greater cyclical volatility than non-GVC activities, FDI-related activities demonstrate more pronounced stability during economic fluctuations.
Speaker
Prof. Zhi Wang is a research professor of Schar School of Policy and Government at George Mason University. He is also a professor and founding director of Research Center of Global Value Chains at University of International Business and Economics in Beijing. He has long list of publication in world leading economic journals, including the American Economic Review, American Journal of Agricultural Economics, Journal of Development Economics, Journal of International Economics, Journal of Economic Dynamics and Control, Journal of Regional Sciences, Journal of Comparative Economics, and Journal of Policy Modeling. He is the coeditor of the 2017 and 2019 Global Value Chain development report published by the World Bank and WTO, and the author and coauthor of several books and many book chapters, including Global Economic Effects of the Asian Currency Devaluations (PIIE, 1998), The Implications of China-Taiwan Economic Liberalization (PIIE, 2010), and Trade in Value Added: Developing New Measures of Cross-Border Trade (CEPR and the World Bank, 2013).
He obtained his PhD in applied economics with a minor in computer and information sciences at the University of Minnesota in 1994.
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