Financial Development and African Participation in Global Value Chains

Françoise Okah Efogo

A chapter in Financing Africa’s Development, 2020, pp 33-52 from Springer

Abstract: Abstract This paper investigates the contribution of financial development for African countries’ participation in global value chains (GVCs). It relies on a review of the theoretical and empirical literature that can shed light on the mechanisms whereby financial development affects value-added trade. A panel econometric analysis covering 36 African countries between 2000 and 2018 supplements the theoretical analysis. Data used for this empirical analysis comes from the WDI (2018), UNCTAD_EORA (The Eora Multi-Region Input-Output Database, 2018) and UNDP (2018) databases. The Financial Development Index is a multidimensional synthetic index constructed by the IMF (2018). Theoretical analysis shows that very little work has addressed this issue, although there is considerable evidence that financial development has a positive impact on the conditions for participation in and upgrading within a GVC. As for the empirical results, they reveal that financial development increases the participation of African countries in GVCs. However, some dimensions of financial development do not have a positive effect. Moreover, regional features are important in understanding the relationship between financial development and value-added trade. This research is therefore a useful tool for decision-making in promoting financial development for deeper African countries’ participation in GVCs.

Keywords: Financial development; Global value chain; Backward participation; Forward participation; Africa (search for similar items in EconPapers)
JEL-codes: F14 F15 F23 (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations: View citations in EconPapers (6)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:spr:aaechp:978-3-030-46482-0_3

Ordering information: This item can be ordered from
http://www.springer.com/9783030464820

DOI: 10.1007/978-3-030-46482-0_3

Access Statistics for this chapter

More chapters in Advances in African Economic, Social and Political Development from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().