International Trade and Pro Poor Growth An application of Value Chain in India

Abstract

Value Chains network spread across the globe have converted the whole world into one single country. This oneness, through interconnectedness among countries can be felt through sliced production of goods at different locations. A good is produced throughout the world now by networks spread across called global value chains. Exports require imports of intermediates and vice versa. A country thus adds some value to the production chain. This study is focused on obtaining the determinants and identifying the impact of this new system of value added production for economic, social and regional development of the trading country. The sample of study is selected as the group of emerging economies BRICS with special focus on India. The bilateral trade determinants are examined by panel gravity model regression. The economic development of the country is examined by replicating the Romer growth model. Lastly the social aspect is examined by studying the impact of value added trade on poverty. The results reflect that trading partner countryand#8223;s per capita income and GDP positively impacts trade. Value added trade causes economic growth. Finally there arises to be no significant relationship between value added trade and poverty. However adding model non-linearities prove that certain country specific characteristics may be required to get full benefits of value added trade. newline