Linkage between Global Production Networks and Financial Integration: Evidence from Portfolio Investment Positions

초록

This paper examines how dispersion in global value chain (GVC) linkages affects countries’ net portfolio investment positions, using data from 155 countries over 2002–2018. GVC linkage dispersion is positively associated with net portfolio positions, suggesting that countries use international financial markets to hedge production network risks. This effect is absent among advanced economies, where outward and inward portfolio flows are more balanced. The results highlight complementarities between real-sector integration and cross-border financial linkages, particularly in less financially liberalized economies.

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