GLOBAL VALUE CHAIN EXPOSURE AND GROWTH VULNERABILITY: EVIDENCE FROM G20 ECONOMIES

The reconfiguration of global supply chains has renewed debate on the macroeconomic implications of global value chain (GVC) integration. This study examines the relationship between GVC exposure and growth volatility in G20 economies from 1995 to 2023. Macroeconomic vulnerability is measured by the rolling standard deviation of real GDP growth, while GVC exposure is proxied by the foreign value-added content of exports. Trade openness is included to distinguish the effects of supply chain integration from broader international trade exposure. Using a fixed-effects panel model with country and time effects, the analysis controls for structural differences and common global shocks. The findings suggest that GVC integration and trade openness primarily transmit external shocks rather than independently generate macroeconomic instability. The results underscore the importance of supply chain diversification, domestic productive capacity, and credible stabilization policies in strengthening economic resilience.