Trade Policy Measures and Their Impact on Global Value Chains (GVCs): An Evidence from Selected South Asian Economies

Abstract

This paper analyzes the impact of Trade policy on Value Chains measured through value added content in the form of intermediates. Panel data model is applied on dataset ranging from the time period 1994-2017 for selected South Asian economies. Data for policy variables is extracted from UN Commodity Trade Database (UN COMTRADE), World Development Indicators (WDI) while for nonpolicy variables is taken from World Governance Indicators (WGI). Findings show that trade policy variable i.e. tariff tax on primary intermediate products affects significantly negative to the trade of  intermediates which predicts that these tariffs restrict connectivity through value chains.