Manufacturing Exports and Gross Value Added: Evidence from Major Manufacturing Economies

This study examines the relationships between foreign direct investment (FDI), manufacturing exports, and manufacturing gross value added (MGVA) across ten major manufacturing economies. It aims to understand how foreign investment and manufacturing export orientation relate to domestic manufacturing value creation. The study uses a quantitative approach with secondary panel data from the World Bank for 2015–2024. The study uses pooled ordinary least squares, fixed-effects, and random-effects models to examine relationships among the selected variables. The Breusch–Pagan Lagrange multiplier and Hausman specification tests assess model selection. The results indicate that foreign direct investment has a negative but statistically insignificant association with manufacturing value added. In contrast, manufacturing exports demonstrate a positive but weakly supported association with manufacturing value added. These findings suggest that greater foreign investment does not necessarily correspond to higher manufacturing value creation, while export orientation may be associated with manufacturing performance. The study highlights the importance of distinguishing international investment and export participation from domestic manufacturing value creation. Furthermore, the findings suggest that foreign investment and export orientation alone cannot adequately explain manufacturing performance. The findings encourage policymakers to strengthen domestic industrial capabilities, technological development, productivity, and value-chain participation alongside strategies that promote foreign investment and manufacturing exports. Further research using sector-specific investment measures and additional economic factors is recommended to strengthen the evidence.