Trade networks and the productivity of MENA firms in global value chains

Rym Ayadi, Giorgia Giovannetti, Enrico Marvasi and Chahir Zaki

Structural Change and Economic Dynamics, 2024, vol. 69, issue C, 10-23

Abstract: Global Value Chain (GVC) participation is typically associated with a productivity premium, yet similar firms can benefit differently depending on the possibility for creating production linkages offered by their countries’ involvement in trade. We show that country-sector intermediate trade network centrality is also positively associated with firms’ productivity, suggesting that the connectivity of the business environment may enhance productivity on top of direct firm-level involvement in GVCs. For a large cross-section of MENA countries included in the World Bank Enterprise Surveys (WBES), we find evidence of productivity premia using several firm-level GVC participation measures and network centrality indicators constructed from the EORA input-output tables. Centrality is also positively associated with firms’ productivity, adding to the direct effect of GVC participation. Our results are confirmed using OLS, multi-level models, Propensity Score Matching techniques, and a Shift-Share instrumental variable approach which help addressing endogeneity issues.

Keywords: Global value chains; Trade networks; Productivity; Firm heterogeneity; MENA region (search for similar items in EconPapers)
JEL-codes: F14 F15 L23 L25 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:streco:v:69:y:2024:i:c:p:10-23

DOI: 10.1016/j.strueco.2023.11.014

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