Linh Nguyen Thi Phuong

The automotive industry plays a crucial role in national and global economic development. Vietnam and the ASEAN-5 countries are commented to be active in the automotive international production network but mainly participate in the low-value-added segments of the global value chains (GVC). This study aims to identify Vietnam’s position and level of participation in the global automotive value chain and compare them to the other ASEAN-5 nations. The paper uses the orthodox and modern trade-related GVC indicators built by Koopman et al. (2010) to accomplish the research objective. The results show that Vietnam and the ASEAN-5 countries located downstream of the global automotive value chain often have less potential to gain more value-added than the upstream position, despite their high level of participation. Compared to ASEAN-5 countries, Vietnam still needs to catch up. Although Vietnam’s auto industry has made many positive changes, it still mainly produces simple products and currently participates in the least added value segment in the global automotive value chain. The underdeveloped support industry in Vietnam is the main cause of this situation. The study makes several practical policy recommendations for Vietnam based on the research findings to improve its position in the production network for the automotive sector in the following years.

Acknowledgment
The authors would like to thank the VNU University of Economics and Business, Hanoi, for financing the Research Project, number BBQT.04.2022.

Type of the article: Research Article

Abstract
This study investigates structural and policy determinants influencing Vietnam’s participation in global value chains, with a specific focus on both forward and backward linkages. The paper addresses an empirical gap in the literature by applying a unified econometric framework to a transitional economy context. The analysis is based on annual time-series data for the period 2010–2021, covering major phases of Vietnam’s trade liberalization, industrial upgrading, and investment openness. Although the data extend only to 2021, this timeframe represents the most recent period for which comprehensive and internationally comparable global value chains indicators are available. The selection is further justified by the structural delay in global value chain data compilation and the coverage of key structural transformations relevant to Vietnam’s development trajectory. Using multiple linear regression models, the study reveals that foreign direct investment and regional trade agreements significantly influence Vietnam’s global value chain position, though their effects differ across linkage types. Specifically, foreign direct investment inflows and regional trade agreements export coverage are negatively associated with forward linkage participation, while regional trade agreements engagement exerts a positive effect on backward linkages. Technological readiness does not exhibit a statistically significant impact, suggesting limited spillover effects from foreign direct investment to domestic firms. These findings underscore the need for more targeted strategies to enhance local value addition, foster production-oriented cooperation under regional trade agreements, and strengthen domestic absorptive capacity. The study offers timely policy implications for Vietnam and contributes to the broader literature on global value chain integration in emerging economies.