Does engagement in global value chains enhance export survivability? Evidence from a transitional country

Abstract

The rapid expansion of global value chains (GVCs) over the past few decades has significantly transformed international trade, leading to a more competitive global market where firms continuously strive to enhance their trade survival capabilities. In export-oriented economies like Vietnam, exports play a crucial role in driving economic growth. This study utilizes a panel probit model to examine the relationship between engagement in GVCs and the export survival of manufacturing firms in Vietnam over the period from 2010 to 2020. The empirical findings indicate that participation in GVCs has a positive impact on the export survivability of Vietnam’s manufacturing firms. In addition, firm characteristics such as size, location in industrial zones, labor productivity, and product diversification all contribute positively to export survival. Notably, state-owned and foreign-owned firms demonstrate superior export persistence compared to non-state-owned and domestic firms, respectively. The study also reveals a negative relationship between GVC participation and the provincial competitiveness index. Based on these results, the study offers several policy recommendations aimed at enhancing firms’ export survivability in foreign markets, thus contributing to sustainable economic development.