Global Value Chains and the Productivity of Firms in MENA countries: Does Connectivity Matter?

Rym Ayadi, Giorgia Giovannetti (), Enrico Marvasi and Chahir Zaki

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: We provide new evidence on the participation of firms within Global Value Chains (GVCs) for a large pool of MENA countries included in the World Bank Enterprise Surveys (WBES). Making use of several firm-level GVC participation indices, we find a positive association with firm productivity gains. Based on this result, we further investigate the complexity of GVC relationships and examine how sector/country connectivity affects firm productivity. Using a multi-level model, we augment our analysis by including centrality indicators calculated on the intermediate trade network, constructed from the EORA input-output tables. Positioning within the network structure of trade in intermediate products also plays a role. Our results indicate a positive effect of the connectivity of the sector on the Total Factor Productivity (TFP) of firms. Results remain robust after we control for the endogeneity between firm productivity and participation in GVCs.

Keywords: global value chains; firm heterogeneity; MENA region; trade networks; productivity. (search for similar items in EconPapers)
JEL-codes: F14 F15 L23 L25 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2020
New Economics Papers: this item is included in nep-ara, nep-bec, nep-eff, nep-int, nep-net and nep-tid
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