Specialisation within global value chains: Transport infrastructure matter upstream

Rainer Lanz and Roberta Piermartini

The World Economy, 2021, vol. 44, issue 8, 2410-2432

Abstract: This paper studies the factors of comparative advantage within global value chains relying on a framework where comparative advantage is measured through the interaction of country and industry characteristics. We find that good institutions give a comparative advantage in the later stages of the production process, whereas good transport infrastructure gives an advantage in the early stages of production. We explain these results by pointing at whether trade costs are additive or multiplicative.

Date: 2021
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