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International Linkages, Value Added Trade and LAC Firms' Productivity

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  • Pierluigi Montalbano
  • Silvia Nenci
  • Carlo Pietrobelli

Abstract

This paper addresses the following research questions: i) are firms characterized by international linkages more productive than other firms? ii) are those belonging to industries more involved in GVCs even more productive? To this end, we combine the WB Enterprise Survey dataset with the new OECD-WTO TiVA dataset and present three main empirical exercises: 1) an analysis of productivity premia associated with participation in international trade and presence of inward FDI; 2) a Cobb-Douglas output function expanded to firms international linkages; 3) a further expanded version of the above relationship including the TIVA-based indicators of value added trade and industry participation and position in global value chain. Our empirical outcomes confirm the presence of a positive causal relationship between participation in international activities and firm performance in the LAC region. Focusing on four big Latin American countries we show that the actual level of involvement into GVCs matters as well.

Suggested Citation

  • Pierluigi Montalbano & Silvia Nenci & Carlo Pietrobelli, 2014. "International Linkages, Value Added Trade and LAC Firms' Productivity," Departmental Working Papers of Economics - University 'Roma Tre' 0198, Department of Economics - University Roma Tre.
    • Handle: RePEc:rtr:wpaper:0198
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    Cited by:

    1. Jean Balié & Davide Del Prete & Emiliano Magrini & Pierluigi Montalbano & Silvia Nenci, 2017. "Agriculture and Food Global Value Chains in Sub-Saharan Africa: Does bilateral trade policy impact on backward and forward participation?," Working Papers 4/17, Sapienza University of Rome, DISS.
    2. Yoshimichi Murakami & Nobuaki Hamaguchi, 2021. "Peripherality, income inequality, and economic development in Latin American countries," Oxford Development Studies, Taylor & Francis Journals, vol. 49(2), pages 133-148, April.
    3. Grazzi, Matteo & Pietrobelli, Carlo & Szirmai, Adam, 2015. "The performance of firms in Latin America and the Caribbean: Microeconomic factors and the role of innovation," MERIT Working Papers 2015-041, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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    More about this item

    Keywords

    International Trade; Trade in Value a dded; Global value chains; Firm productivity.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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