Global Production Networks and Employment: A Developing Country Perspective
AbstractThis paper provides evidence of the links between Global Value Chains (GVCs) and labour market outcomes, focusing on developing economies. The literature generally indicates that firms with international linkages—which we use here as a proxy for GVC involvement—tend to employ more workers, pay higher wages, and employ more skilled workers than firms that deal exclusively with the domestic market. Our results are consistent with existing evidence found in developed economies, with internationalised firms tending to hire more workers and pay higher wages in developing economies as well. We also find a positive significant relationship between the number of skilled workers and firms with international linkages but not in certain key economies. However, this comes more from firms who are importers, exporters and foreign affiliates rather than engaging in any of these activities individually. We attribute this finding to the predominance of assembly work performed in many of the economies under consideration, where unskilled workers tend to dominate. Finally, we see a strong, positive association between shares of female workers and firms with international linkages. Engaging in international activity is shown to provide greater opportunities for women to enter the formal labour market.
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Bibliographic InfoPaper provided by OECD Publishing in its series OECD Trade Policy Papers with number 154.
Date of creation: 14 May 2013
Date of revision:
international trade; employment; global value chains; skills; wages; gender;
Find related papers by JEL classification:
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- F66 - International Economics - - Economic Impacts of Globalization - - - Labor
- F68 - International Economics - - Economic Impacts of Globalization - - - Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-09-26 (All new papers)
- NEP-CSE-2013-09-26 (Economics of Strategic Management)
- NEP-DEM-2013-09-26 (Demographic Economics)
- NEP-INT-2013-09-26 (International Trade)
- NEP-LAB-2013-09-26 (Labour Economics)
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