Do Non-Tariff Measures Contract the Length of Global Value Chains?

This study assesses the impact of a variety of different NTMs on GVC length and explores heterogeneity in these effects depending on countries and sectors with an extensive dataset covering 12 sectors across 171 countries from 2012 to 2022. Our results indicate that all kinds of NTMs tend to reduce the length of GVCs. This outcome appears to be driven primarily by developing countries and the manufacturing sector. This suggests that regulatory changes accumulate along interlinked country-sector relationships and ultimately disrupt the fragmentation and complexity of production networks.