https://orcid.org/0000-0002-5144-116X
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Abstract
The study investigated GVC and exchange rate comovements from 1990 to 2018. The study employed a continuous wavelet coherence procedure to investigate the time-frequency dependence of global value chain (GVC) participation and exchange rates relationship in Africa. We find from the study that there is interdependency between exchange rates and global value chain participation only in the very short term for all selected countries. The study finds interdependent and well-governed networks continue to experience muted effects of exchange rate effects on GVC participation while independent firms in countries participating in GVC forward integration are negatively impacted.
Impact statement
The use of continuous wavelet coherence technique to monitor global value chain (GVC) participation levels amidst extreme market volatility offers unprecedented insights for both countries and firms. By enabling the measurement of interdependency between exchange rates and African economies’ participation in GVCs, this approach facilitates informed decision-making and risk management strategies. It empowers stakeholders to gauge the impact of macroeconomic variables, particularly exchange rates, on GVC involvement, thereby fostering adaptability and resilience in an ever-changing economic landscape. Ultimately, this innovation enhances the ability of nations and businesses to navigate volatile market conditions and optimize their engagement in global value chains.
REVIEWING EDITOR:
Disclosure statement
No potential conflict of interest was reported by the author(s).
Additional information
Notes on contributors
Genevieve Gyasi
Genevieve Gyasi is a Lecturer/Researcher at the University of Energy and Natural Resources (UENR) in Ghana, with a PhD in Finance from Kwame Nkrumah University of Science and Technology, Kumasi Ghana. She worked as a graduate research fellow at the United Nations Economic Commission for Africa in Rabat, Morocco, North Africa working in the Economics and Social Affairs department from 2019 to 2021. The research fellowship covered topics in macroeconomics, trade, labor, migration, and social affairs. Her current research interest covers International Economics, Finance, and Econometrics topics in Developmental and Financial Economics in Africa. This paper which is part of a series of research projects seeks to address issues that affect the African continent in recent years.
Joseph Magnus Frimpong
Prof. Joseph Magnus Frimpong is a Professor in Finance at the School of Business, KNUST. He is also an Economist and a Business Consultant. He is a director of some successful businesses including Juaben Oil Mills Limited, Juaben-Ashanti, and Sir Magnus Hotel in Kumasi. He was appointed a member of the Governing Board of the National Development Planning Commission (NDPC) of the Republic of Ghana in 2019. Prior to his appointment to serve on the NDPC board, Prof. Magnus Frimpong functioned as a Dean of KNUST School of Business in 2007. He also served as the Head of Department, Department of Accounting and Finance, KNUST School of Business between 2007 to 2015. His wide international experience and in-depth knowledge in Mathematics, Economics, Finance, Econometrics, Research, Entrepreneurship, and Business Consulting have benefited numerous people in academia and industry alike.
Kwame Mireku
Kwame Mireku, Ph.D is an accounting and finance Senior lecturer at Kwame Nkrumah University of Science and Technology. Mireku’s research interests include Financial Literacy, SME Financing, Economic Growth and Financial Stability, Stock market dynamics, Behavioral Finance amongst others.