Global Value Chains in Low and Middle Income Countries

Victor Kummritz () and Bastiaan Quast ()
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Victor Kummritz: IHEID, The Graduate Institute of International and Development Studies, Geneva
Bastiaan Quast: IHEID, The Graduate Institute of International and Development Studies, Geneva
Authors registered in the RePEc Author Service: Victor Stolzenburg

No 10-2016, CTEI Working Papers series from Centre for Trade and Economic Integration, The Graduate Institute

Abstract: Global Value Chains (GVCs) can provide new means for developing economies to industrialise. To fully seize these opportunities, it is necessary to comprehensively measure both the intensity and type of countries’ GVC integration patterns to better understand the relationship between GVCs and development. In this paper, we apply the new R package decompr to recent OECD input-output data with extended country coverage to analyse the integration patterns of developing economies in a more detailed way. We provide evidence that trends in GVCs are increasingly driven by developing countries. In addition, we show that while per capita GDP does not predict the intensity of GVC integration well, it determines the type of integration. High-income countries mainly export intermediates into GVCs and serve as markets of final demand. In contrast, developing economies join GVCs mostly in the assembly stage. However, there is evidence that developing countries have begun to shift their participation from the production of final to intermediate goods, moving upstream in GVCs and out of assembly.

Keywords: Global Value Chains; Trade in Value Added; Export Decomposition (search for similar items in EconPapers)
JEL-codes: E01 F13 F14 F23 L14 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2016-01-12
New Economics Papers: this item is included in nep-int and nep-mac
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