Global value chains participation and economic upgrading: Evidence from developing countries

Malak Hosny ()
Additional contact information
Malak Hosny: Faculty of Economics and Political Science Cairo University & Paris 1 Panthéon Sorbonne University

Economics Bulletin, 2023, vol. 43, issue 4, 1626 - 1641

Abstract: Global Value Chains (GVC) have immensely increased during the last years, particularly in developing countries which are increasingly engaged in international production networks. Therefore, the objective of the paper is to explore the effect of GVC participation on firms' productivity and products' diversification in developing countries. In order to study this relationship between GVC and economic upgrading, a micro-level analysis is performed based on recent firm-level data from the World Bank Enterprise Surveys (WBES), by analysing a dataset of firms active in several developing countries. Controlling for fixed effects, the results suggest that firms' involvement in GVC has a significant positive effect on productivity. Firms that participate in GVC not only perform better, showing additional productivity gains, but also introduce new products. Nevertheless, sectoral evidence shows that this effect varies across industries, with a particularly negative effect of the interaction term in the textile and garment sector. Furthermore, the paper provides evidence that the positive effect of GVC is more pronounced for initially highly skilled firms.

Keywords: Global Value Chains; Productivity; Firm-Level data; Developing countries. (search for similar items in EconPapers)
JEL-codes: F1 L2 (search for similar items in EconPapers)
Date: 2023-12-30
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2023/Volume43/EB-23-V43-I4-P141.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-23-00394

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().