The evolution of manufacturing comparative advantage along global value chains: the amplifying role of logistics performance

Abstract

This paper examines the evolution of manufacturing comparative advantage within the context of Global Value Chains (GVCs) and explores the amplifying role of logistics performance in this evolution. We employ a framework that transitions from the Product Space at the product level to the Industry Space at the industry level, utilising value-added exports instead of gross exports. Through empirical analysis, we confirm the inter-industry network effect (measured by industry density) on manufacturing comparative advantage along GVCs. Additionally, we investigate the logistics performance index (LPI) as a moderator, shedding light on its crucial role in the evolution mechanism. Furthermore, we identify heterogeneity among different economies in terms of the amplifying effect of LPI on the evolution pattern of manufacturing comparative advantage, which can be attributed to significant differences in industry structure between developed and developing economies operating within GVCs.