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Begin New Search Topic Global Value Chains Author Shandre Mugan Thangavelu

1. Does Economic Policy Uncertainty Impact Firm GVC Participation? Microdata Evidence from India

Author:
Ketan Reddy, Subash Sasidharan, and Shandre Mugan Thangavelu
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
In this study, we examine the implications of economic policy uncertainty on global value chain (GVC) participation and the integration of Indian manufacturing firms using firm-level data. Using panel data from 2004 to 2021, we find that economic policy uncertainty (EPU) impedes GVC participation and firm integration. Further, we find that the impact of EPU on GVC participation operates through the financial constraint channel with highly leveraged and low-liquidity firms. Using survival analysis, we also highlight that higher EPU results in higher exit from GVCs and reduces entry into GVCs.
Topic:
Economic Policy, Manufacturing, Global Value Chains, and Microdata
Political Geography:
South Asia, India, and Asia

2. Investment Facilitation and Promotion in Cambodia: Impact of Provincial-level Characteristics on Multinational Activities

Author:
Shandre Mugan Thangavelu, Leng Soklong, Vutha Hing, and Ratha Kong
Publication Date:
08-2023
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the foreign direct investment policy of Cambodia in terms of investment promotion and facilitation. The study examines the key factors affecting the location of foreign firms (with more than 10% ownership) in Cambodia accounting for key provincial-level (18 provinces) characteristics, such as infrastructure (roads), population density (young population), special economic zones (SEZs), the number of establishments, poverty rate, rainfall, water supply, electricity supply, sharing of an international border, sharing a coastal area, and consumption per capita. The paper uses administrative data from the Council for Development of Cambodia, which manages foreign direct investment and the special economic zones in Cambodia. The study consists of nearly 500 foreign firms that have been approved to invest in Cambodia from 2017 to 2020. The results indicate a positive impact of road infrastructure (national and provincial roads) on foreign investment activities as it improves the movement of people and goods, reduces transaction costs, increases market access, and increases the service linkages within the domestic economy. At the provincial level, we observe that electricity supply, rainfall (water supply), land area, and a young working population have a positive impact on the investment decisions of foreign investors in the provinces of Cambodia. We also observe a negative impact of SEZs on foreign investment in Cambodia. The results indicate an urgent need for structural transformation of the Cambodian economy in terms of investment in soft and hard infrastructure and the development of the critical skills and human capital of the labour force. It is important to improve and upgrade the SEZs with key technologies and innovation to be more competitive in attracting foreign investment activities, which will be critical for increasing the competitiveness of Cambodian industries in global value chain activities.
Topic:
Multinational Corporations, Investment, Trade, and Global Value Chains
Political Geography:
Cambodia and Southeast Asia

3. New Dynamism in ASEAN and East Asia: The Role of the RCEP as a ‘Living’ Agreement

Author:
Shandre Mugan Thangavelu, Fukunari Kimura, and Dionisius Narjoko
Publication Date:
12-2022
Content Type:
Policy Brief
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This policy brief highlights the importance of maintaining open regionalism and economic and regional integration for sustainable and inclusive regional and global growth in the Association of Southeast Asian Nations (ASEAN) and East Asia. With rising global uncertainties and global value chain (GVC) disruptions, the region requires a new economic and social agenda beyond trading arrangements, and the alignment of global, regional, and domestic policies and structural issues. The Regional Comprehensive Economic Partnership (RCEP) is expected to provide a new institutional framework under the built-in institutional feature (Chapter 18) of the agreement.
Topic:
International Trade and Finance, Regional Cooperation, Regionalism, and Global Value Chains
Political Geography:
Asia and ASEAN

4. Potential Impact of RCEP and Structural Transformation on Cambodia

Author:
Shandre Mugan Thangavelu and Vutha Hing
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Economic Research Institute for ASEAN and East Asia (ERIA)
Abstract:
This paper examines the potential impact of the Regional Comprehensive Economic Partnership (RCEP) on the Cambodian economy in terms of trade, output growth, and employment. It also provides quantitative (structural gravity model estimation and simulation) and qualitative trade policy evaluation in terms of exports, output, and the structural transformation of the economy in global and regional value chains. The results highlight the importance of RCEP for the pandemic and post-pandemic recovery and the structural transformation of the Cambodian economy. The paper also provides key policy recommendations to fully maximise the benefits of RCEP for Cambodia for inclusive and sustainable growth.
Topic:
Economics, International Trade and Finance, Regional Cooperation, and Global Value Chains
Political Geography:
Asia and Cambodia