Global Value Chain Participation, Competition, and Markups: Evidence from Ethiopian Manufacturing Firms

Jieun Choi (), Emiko Fukase () and Albert G. Zeufack ()
Additional contact information
Jieun Choi: World Bank, USA, Postal: Senior Economist, World Bank, 1818 H Street, NW, Washington DC, 20433, USA.
Emiko Fukase: World Bank, USA, Postal: Consultant, World Bank, 1818 H Street, NW, Washington DC, 20433, USA.
Albert G. Zeufack: World Bank, USA, Postal: Chief Economist, World Bank, 1818 H Street, NW, Washington DC, 20433, USA.

Journal of Economic Integration, 2021, vol. 36, issue 3, 491-517

Abstract: This study uses detailed manufacturing census panel data for 2000 to 2014 to explore the relationship between Ethiopian firms’ global value chain (GVC) participation and markups. We find that GVC firms, defined as firms involved in both exporting and importing intermediate inputs, tend to have lower markups relative to non-trading firms and firms that are involved only in material imports. Moreover, the more intensely a firm is integrated into a GVC (measured by the share of export value added and imported inputs in total sales), the lower its markup is. Finally, we explore competition effects at the industry level and find that firms operating in industries with a relatively high GVC presence and suppliers selling inputs to such industries tend to have lower markups owing to horizontal competition and backward linkages, respectively. All of these findings suggest that GVC participation is associated with greater competition for Ethiopian firms.

Keywords: competition; Ethiopia; global value chain; markup (search for similar items in EconPapers)
JEL-codes: D22 F14 F61 L11 O14 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.e-jei.org Full text (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:ris:integr:0835

Access Statistics for this article

Journal of Economic Integration is currently edited by Seongeun Kim

More articles in Journal of Economic Integration from Center for Economic Integration, Sejong University Contact information at EDIRC.
Bibliographic data for series maintained by Yunhoe Kim ().