Technology / ORIGINAL ARTICLE

How important is GVC participation to export upgrading?*

Posted On: Sep 23, 2021   |   Posted By: The World Economy

Abstract
Exporting higher quality and complex products is deemed pathway to economic growth and development. However, producing such products is knowledge-intensive and requires quality intermediate inputs and advanced technologies. Integration into global trade networks is increasingly argued to be among the pathways to obtain such inputs and technologies, although not all countries may benefit equally from such integration. This paper builds on these arguments and investigates how participation in the global value chain affects the quality of exported products. Using a highly disaggregated product-level export data from 122 countries, we find that participation in GVC impacts positively on the quality of exported products and brings the quality level closer to the quality frontier. While this result persists in the sub-sample comprising developed countries, developing countries only benefit from backward GVC participation. Overall, the results indicate that GVC participation...

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