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Global value chain participation and its impact on industrial upgrading

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  • Kailan Tian
  • Erik Dietzenbacher
  • Richard Jong‐A‐Pin

Abstract

Participation in global value chains (GVCs) has become a central topic in trade and development policy. It has opened new ways to achieve industrial upgrading. However, some theoretical models suggest that not all countries will upgrade through participation in GVCs. Using panel data from the World Input‐Output Database, we examine the effects of backward and forward GVC participation on three dimensions of industrial upgrading (process, product and skill upgrading). We find that backward GVC participation provides more upgrading opportunities for developing countries as it enables a less developed country to import sophisticated inputs. This activates learning through embodied knowledge. In contrast, forward participation has higher level of upgrading effect on developed countries.

Suggested Citation

  • Kailan Tian & Erik Dietzenbacher & Richard Jong‐A‐Pin, 2022. "Global value chain participation and its impact on industrial upgrading," The World Economy, Wiley Blackwell, vol. 45(5), pages 1362-1385, May.
    • Handle: RePEc:bla:worlde:v:45:y:2022:i:5:p:1362-1385
    DOI: 10.1111/twec.13209
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    2. Abdullah Altun & Ilker Ibrahim Avsar & Taner Turan & Halit Yanikkaya, 2023. "Does global value chain participation boost high technology exports?," Journal of International Development, John Wiley & Sons, Ltd., vol. 35(5), pages 820-837, July.
    3. Yu, Hui & Li, Huiru, 2023. "How does the global metal industry value network affect industrial structure upgrading ? The perspective of industry chain," Resources Policy, Elsevier, vol. 85(PB).
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    5. Can Li & Qi He & Han Ji & Shengguo Yu & Jiao Wang, 2023. "Reexamining the Impact of Global Value Chain Participation on Regional Economic Growth: New Evidence Based on a Nonlinear Model and Spatial Spillover Effects with Panel Data from Chinese Cities," Sustainability, MDPI, vol. 15(18), pages 1-31, September.

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