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Kashika Arora () and Areej A. Siddiqui ()
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Areej A. Siddiqui: Assistant Professor, Indian Institute of Foreign Trade, New Delhi

No 2152, Working Papers from Indian Institute of Foreign Trade

Abstract: This paper aims at determining how technological capabilities interact with trade and global value chains (GVCs) participation to aid in the upgradation process. By constructing a panel data set and analysing through FGLS modelling, we observe trade performance of 14 developing countries from 2000 to 2018. It is found that technological capabilities determine the initial structure of local firms in trade and GVCs and they also deliberate the extent to which local firms in developing countries manage to leverage knowledge flows and move into activities of greater technological complexity in accordance with their existing comparative advantages. The results point to the critical role of national learning variables impacting countries’ performance over time measured by manufacturing value added. While emerging economies have synergistic relationships between variables explaining technological capabilities and trade and GVC performance, however, certain innate country effects have also their role to play.

Keywords: Trade; global value chains (GVCs); technological capabilities; developing countries; panel data. (search for similar items in EconPapers)
JEL-codes: F14 O14 O19 O31 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2021
New Economics Papers: this item is included in nep-cse and nep-int
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