Regional services trade agreements and upgrading in global value chains: an analysis from the network perspective

Against the backdrop of economic globalization, relationships among countries established through regional services trade agreements (services RTAs) have become increasingly complex. Assessing a country’s global value chain (GVC) position requires considering its place within the network of services RTAs formed with other economies. Using data from 60 countries for the period 2007–2021, this study estimates the impact of the services RTA network, with network linkages weighted by agreement depth, on countries’ GVC positions. The results indicate that the expansion and deepening of the services RTA network significantly promote the upgrading of countries’ GVC positions, and the conclusion is robust. This positive effect operates primarily through three channels: reductions in services trade costs, technology spillovers, and adjustments to production length. Heterogeneity analyses reveal that the positive effect of the services RTA network on GVC upgrading is more pronounced in North-North and North-South cooperation as well as in multilateral agreements, and that this effect varies across sectors. This study contributes to understanding how the services RTA network affects the development of global value chains and provides insights for countries seeking to improve their services trade policies.