Global Value Chain Position, Exchange Rate Volatility, And Export Performance

Abstract

This study examines the moderating effect of Global Value Chain (GVC) position on the relationship between exchange rate volatility and export performance using data from ten ASEAN economies over the period 2000- 2022. Employing a comprehensive dataset covering 15 manufacturing industries, we construct GVC position indicators based on forward and backward linkage measures to analyze how value chain positioning influences exchange rate elasticity of exports. Our empirical findings reveal that while exchange rates continue to significantly impact export competitiveness, higher GVC positions substantially weaken this sensitivity. Specifically, a one-unit increase in GVC position reduces export exchange rate elasticity by approximately 0.3-0.4 percentage points. The results suggest that as ASEAN economies advance toward higher value-added activities within global production networks, their exports become less vulnerable to exchange rate fluctuations. These findings have important implications for trade policy and industrial development strategies, particularly for emerging economies seeking to enhance export stability through value chain upgrading.