Vietnam’s participation in the global value chains: An empirical study on the automotive industry

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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.

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    • Figure 1. Position and participation Indexes of Vietnam in the global automotive value chain from 2010 to 2021
    • Figure 2. Vietnam’s participation in the backward and forward linkage of the global automotive value chain from 2010 to 2021
    • Figure 3. Position indexes of Vietnam and ASEAN-5 countries in the global automotive value chain from 2010 to 2021
    • Figure 4. Participation indexes of Vietnam and ASEAN-5 in the global automotive value chain from 2010 to 2021
    • Figure 5. Participation of Vietnam and ASEAN-5 countries in the global automotive value chain in 2010 and 2021
    • Conceptualization
      Linh Nguyen Thi Phuong, Anh Vu Hai
    • Formal Analysis
      Linh Nguyen Thi Phuong, Anh Vu Hai
    • Funding acquisition
      Linh Nguyen Thi Phuong, Anh Vu Hai
    • Investigation
      Linh Nguyen Thi Phuong, Anh Vu Hai
    • Methodology
      Linh Nguyen Thi Phuong
    • Software
      Linh Nguyen Thi Phuong, Anh Vu Hai
    • Supervision
      Linh Nguyen Thi Phuong, Anh Vu Hai
    • Writing – original draft
      Linh Nguyen Thi Phuong, Anh Vu Hai
    • Writing – review & editing
      Linh Nguyen Thi Phuong, Anh Vu Hai
    • Data curation
      Anh Vu Hai
    • Resources
      Anh Vu Hai