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Participation of Developing Countries in Global Value Chains: Implications for Trade and Trade-Related Policies

Przemyslaw Kowalski (), Javier Lopez Gonzalez, Alexandros Ragoussis and Cristian Ugarte
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Alexandros Ragoussis: OECD

No 179, OECD Trade Policy Papers from OECD Publishing

Abstract: Although global value chains (GVCs) are often considered a defining feature of the current wave of globalisation, little is known about: i) what drives GVC participation; ii) what the benefits associated to growing participation are; or iii) how developing countries engage and benefit from GVCs. This paper tackles these questions empirically. The evidence indicates there are important benefits to be had from wider participation in terms of enhanced productivity, sophistication and diversification of exports. Structural factors, such as geography, size of the market and level of development are found to be key determinants of GVC participation. Trade and investment policy reforms as well as improvements of logistics and customs, intellectual property protection, infrastructure and institutions can, however, also play an active role in promoting further engagement. A more in-depth analysis of GVC participation and policy context in five developing sub-regions in Africa, the Middle East and Asia highlights key differences and similarities, and can be a starting point for policy makers in the regions to assess their countries’ GVC engagement and to consider policy options.

Keywords: developing countries; East and Southern Africa; global value chains; GVCs; intermediate inputs; investment; Middle East and North Africa; regional trade agreements; South Asia; South East Asia; trade policy; upgrading; West and Central Africa (search for similar items in EconPapers)
JEL-codes: F1 F2 F6 (search for similar items in EconPapers)
Date: 2015-04-01
New Economics Papers: this item is included in nep-ara, nep-int and nep-sea
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