Drivers of productivity change in global value chains: Reallocation vs. innovation

Ivan Savin and Philipp Mundt

Economics Letters, 2022, vol. 220, issue C

Abstract: We investigate the role of technological improvement and market share reallocation in determining global changes in sectoral labor productivity. Contrary to previous work that neglects dependencies between suppliers in global value chains, we account for input linkages that impact both channels of productivity improvement. Using sector-level data from the World Input–Output Database, we show that reallocation between countries has a larger effect on productivity change than innovation within countries.

Keywords: Input–output analysis; Market share reallocation; Productivity decomposition; Production network; Technological improvement (search for similar items in EconPapers)
JEL-codes: C67 E24 L14 L16 O47 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Working Paper: Drivers of productivity change in global value chains: Reallocation vs. innovation (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:220:y:2022:i:c:s0165176522003524

DOI: 10.1016/j.econlet.2022.110878

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