IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v80y2023icp347-365.html
   My bibliography  Save this article

Global value chains and economic complexity index: Evidence from generalized panel quantile regression

Author

Listed:
  • Ashraf, Sania
  • P., Jithin
  • Slim, Skander
  • Najeeb, Roshen

Abstract

This paper investigates the impact of global value chains (GVCs) participation on economic complexity for a sample of underdeveloped, moderately developed, and developed countries which includes 42 economies from 2000 to 2018. Our empirical analysis finds that the influence of GVC participation on economic complexity varies across quantiles as it has adverse and significant effects on economic complexity in the first five lower quantiles (5th - 25th). It indicates that GVC participation has adverse impacts on economic complexity except for the economy with higher economic complexity. Moreover, forward participation is negatively associated with economic complexity in all the quantiles except for the 90th quantile. In countries with lower and moderate economic complexity, forward participation has a negative impact on how complex the economy is. Alongside, backward participation has positive and significant impacts on economic complexity in the 85th, 90th, and 95th quantiles implying that in a more complex economy, backward participation is positively correlated with economic complexity.

Suggested Citation

  • Ashraf, Sania & P., Jithin & Slim, Skander & Najeeb, Roshen, 2023. "Global value chains and economic complexity index: Evidence from generalized panel quantile regression," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 347-365.
    • Handle: RePEc:eee:ecanpo:v:80:y:2023:i:c:p:347-365
    DOI: 10.1016/j.eap.2023.08.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592623001881
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2023.08.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Riccardo Crescenzi & Carlo Pietrobelli & Roberta Rabellotti, 2014. "Innovation drivers, value chains and the geography of multinational corporations in Europe," Journal of Economic Geography, Oxford University Press, vol. 14(6), pages 1053-1086.
    2. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    3. Mikael Lindahl & Alan B. Krueger, 2001. "Education for Growth: Why and for Whom?," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1101-1136, December.
    4. Bruno Carballa Smichowski & Cédric Durand & Steven Knauss, 2021. "Participation in global value chains and varieties of development patterns," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 45(2), pages 271-294.
    5. Jean Imbs & Romain Wacziarg, 2003. "Stages of Diversification," American Economic Review, American Economic Association, vol. 93(1), pages 63-86, March.
    6. Benjamin Davies & David C. Maré, 2021. "Relatedness, complexity and local growth," Regional Studies, Taylor & Francis Journals, vol. 55(3), pages 479-494, March.
    7. Keun Lee & Marina Szapiro & Zhuqing Mao, 2018. "From Global Value Chains (GVC) to Innovation Systems for Local Value Chains and Knowledge Creation," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 424-441, July.
    8. Hao Xiao & Bo Meng & Jiabai Ye & Shantong Li, 2020. "Are global value chains truly global?," Economic Systems Research, Taylor & Francis Journals, vol. 32(4), pages 540-564, October.
    9. Manuel R. Agosin & Roberto Alvarez & Claudio Bravo‐Ortega, 2012. "Determinants of Export Diversification Around the World: 1962–2000," The World Economy, Wiley Blackwell, vol. 35(3), pages 295-315, March.
    10. Mr. Kevin C Cheng & Sidra Rehman & Dulani Seneviratne & Shiny Zhang, 2015. "Reaping the Benefits from Global Value Chains," IMF Working Papers 2015/204, International Monetary Fund.
    11. Ricardo Hausmann & Bailey Klinger, 2007. "The Structure of the Product Space and the Evolution of Comparative Advantage," Growth Lab Working Papers 10, Harvard's Growth Lab.
    12. Young, Andrew T. & Sheehan, Kathleen M., 2014. "Foreign aid, institutional quality, and growth," European Journal of Political Economy, Elsevier, vol. 36(C), pages 195-208.
    13. Andrea Morrison & Carlo Pietrobelli & Roberta Rabellotti, 2008. "Global Value Chains and Technological Capabilities: A Framework to Study Learning and Innovation in Developing Countries," Oxford Development Studies, Taylor & Francis Journals, vol. 36(1), pages 39-58.
    14. Mello, Marcelo & Perrelli, Roberto, 2003. "Growth equations: a quantile regression exploration," The Quarterly Review of Economics and Finance, Elsevier, vol. 43(4), pages 643-667.
    15. Evan Osborne, 2006. "The Sources Of Growth At Different Stages Of Development," Contemporary Economic Policy, Western Economic Association International, vol. 24(4), pages 536-547, October.
    16. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2006. "Distance to Frontier, Selection, and Economic Growth," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 37-74, March.
    17. Ron Boschma & Simona Iammarino, 2009. "Related Variety, Trade Linkages, and Regional Growth in Italy," Economic Geography, Clark University, vol. 85(3), pages 289-311, July.
    18. Albulescu, Claudiu Tiberiu & Tiwari, Aviral Kumar & Yoon, Seong-Min & Kang, Sang Hoon, 2019. "FDI, income, and environmental pollution in Latin America: Replication and extension using panel quantiles regression analysis," Energy Economics, Elsevier, vol. 84(C).
    19. Daron Acemoglu & James A. Robinson, 2008. "Persistence of Power, Elites, and Institutions," American Economic Review, American Economic Association, vol. 98(1), pages 267-293, March.
    20. Hartmann, Dominik & Guevara, Miguel R. & Jara-Figueroa, Cristian & Aristarán, Manuel & Hidalgo, César A., 2017. "Linking Economic Complexity, Institutions, and Income Inequality," World Development, Elsevier, vol. 93(C), pages 75-93.
    21. Pierre-Alexandre Balland & Cristian Jara-Figueroa & Sergio G. Petralia & Mathieu P. A. Steijn & David L. Rigby & César A. Hidalgo, 2020. "Complex economic activities concentrate in large cities," Nature Human Behaviour, Nature, vol. 4(3), pages 248-254, March.
    22. Jérôme Vandenbussche & Philippe Aghion & Costas Meghir, 2006. "Growth, distance to frontier and composition of human capital," Journal of Economic Growth, Springer, vol. 11(2), pages 97-127, June.
    23. Raphael Kaplinsky & Masuma Farooki, 2011. "What are the implications for global value chains when the market shifts from the north to the south?," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 4(1/2/3), pages 13-38.
    24. Herrera-Echeverri, Hernán & Haar, Jerry & Estévez-Bretón, Juan Benavides, 2014. "Foreign direct investment, institutional quality, economic freedom and entrepreneurship in emerging markets," Journal of Business Research, Elsevier, vol. 67(9), pages 1921-1932.
    25. Lapatinas, Athanasios, 2019. "The effect of the Internet on economic sophistication: An empirical analysis," Economics Letters, Elsevier, vol. 174(C), pages 35-38.
    26. Longmore, Rohan & Jaupart, Pascal & Cazorla, Marta Riveira, 2014. "Toward economic diversification in Trinidad and Tobago," Policy Research Working Paper Series 6840, The World Bank.
    27. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    28. Keun Lee & Marina Szapiro & Zhuqing Mao, 2018. "Correction to: From Global Value Chains (GVC) to Innovation Systems for Local Value Chains and Knowledge Creation," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 575-575, July.
    29. Rasmus Lema & Roberta Rabellotti & Padmashree Gehl Sampath, 2018. "Innovation Trajectories in Developing Countries: Co-evolution of Global Value Chains and Innovation Systems," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 345-363, July.
    30. Nguyen, Canh Phuc & Su, Thanh Dinh, 2021. "Economic integration and economic complexity: The role of basic resources in absorptive capability in 40 selected developing countries," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 609-625.
    31. David Powell, 2013. "A New Framework for Estimation of Quantile Treatment Effects Nonseparable Disturbance in the Presence of Covariates," Working Papers WR-824-1, RAND Corporation.
    32. Jaana Remes, Jan Mischke and Mekala Krishnan, 2018. "Solving the Productivity Puzzle: The Role of Demand and the Promise of Digitization," International Productivity Monitor, Centre for the Study of Living Standards, vol. 34, pages 28-51, Fall.
    33. Grossman, Gene M. & Helpman, Elhanan, 1991. "Trade, knowledge spillovers, and growth," European Economic Review, Elsevier, vol. 35(2-3), pages 517-526, April.
    34. Shujin Zhu & Renyu Li, 2017. "Economic complexity, human capital and economic growth: empirical research based on cross-country panel data," Applied Economics, Taylor & Francis Journals, vol. 49(38), pages 3815-3828, August.
    35. Flavio L. Pinheiro & Pierre-Alexandre Balland & Ron Boschma & Dominik Hartmann, 2022. "The Dark Side of the Geography of Innovation. Relatedness, Complexity, and Regional Inequality in Europe," Papers in Evolutionary Economic Geography (PEEG) 2202, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2022.
    36. Adam B. ELHIRAIKA & Michael M. MBATE, 2014. "Assessing the Determinants of Export Diversification in Africa," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 14(1), pages 147-160.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gao, Peng & Zhang, Kunpeng & Zheng, Peng, 2024. "The impact of industrial digitization on the global value chains position: Evidence from China’ s industry sectors," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 147-162.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. F. Colozza & R. Boschma & A. Morrison & C. Pietrobelli, 2021. "The importance of global value chains and regional capabilities for the economic complexity of EU-regions," Papers in Evolutionary Economic Geography (PEEG) 2139, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2021.
    2. Ben Saad, Myriam & Brahim, Mariem & Schaffar, Alexandra & Guesmi, Khaled & Ben Saad, Rym, 2023. "Economic complexity, diversification and economic development: The strategic factors," Research in International Business and Finance, Elsevier, vol. 64(C).
    3. Balland, Pierre-Alexandre & Broekel, Tom & Diodato, Dario & Giuliani, Elisa & Hausmann, Ricardo & O'Clery, Neave & Rigby, David, 2022. "Reprint of The new paradigm of economic complexity," Research Policy, Elsevier, vol. 51(8).
    4. Hidalgo, César A., 2023. "The policy implications of economic complexity," Research Policy, Elsevier, vol. 52(9).
    5. Valentine Soumtang Bime & Dieudonné Mignamissi & Agathe Cassandra Koumis Ngagni, 2024. "Does financial openness matter for economic transformation in sub-Saharan Africa?," Economic Change and Restructuring, Springer, vol. 57(2), pages 1-49, April.
    6. Eduardo Hernandez-Rodriguez & Ron Boschma & Andrea Morrison & Xianjia Ye, 2024. "Functional upgrading and downgrading in global value chains: The role of complementary interregional value chain linkages in EU regions," Papers in Evolutionary Economic Geography (PEEG) 2432, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2024.
    7. Riccardo Crescenzi & George Petrakos, 2016. "The European Union and its neighboring countries: The economic geography of trade, Foreign Direct Investment and development," Environment and Planning C, , vol. 34(4), pages 581-591, June.
    8. Coniglio, Nicola D. & Vurchio, Davide & Cantore, Nicola & Clara, Michele, 2021. "On the evolution of comparative advantage: Path-dependent versus path-defying changes," Journal of International Economics, Elsevier, vol. 133(C).
    9. Canh Phuc Nguyen & Thanh Dinh Su, 2021. "Financing the economy: The multidimensional influences of financial development on economic complexity," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(4), pages 644-684, May.
    10. Nicola Cortinovis & Dongmiao Zhang & Ron Boschma, 2022. "Regional diversification and intra-regional wage inequality in the Netherlands," Papers in Evolutionary Economic Geography (PEEG) 2216, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Aug 2022.
    11. Dominik Hartmann & Flavio L. Pinheiro, 2022. "Economic complexity and inequality at the national and regional level," Papers 2206.00818, arXiv.org, revised Jun 2022.
    12. Isaac Ketu & Paul Ningaye, 2024. "Sectoral Employment Shares Shape Economic Complexity: Empirical Evidence from African Countries," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(2), pages 168-187, May.
    13. Balland, Pierre-Alexandre & Broekel, Tom & Diodato, Dario & Giuliani, Elisa & Hausmann, Ricardo & O'Clery, Neave & Rigby, David, 2022. "The new paradigm of economic complexity," Research Policy, Elsevier, vol. 51(3).
    14. Naima Chrid & Sami Saafi & Mohamed Chakroun, 2021. "Export Upgrading and Economic Growth: a Panel Cointegration and Causality Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(2), pages 811-841, June.
    15. Diogo Ferraz & Fernanda P. S. Falguera & Enzo B. Mariano & Dominik Hartmann, 2021. "Linking Economic Complexity, Diversification, and Industrial Policy with Sustainable Development: A Structured Literature Review," Sustainability, MDPI, vol. 13(3), pages 1-29, January.
    16. Ron Boschma, 2024. "An evolutionary approach to regional studies on global value chains," Regional Studies, Taylor & Francis Journals, vol. 58(7), pages 1492-1500, July.
    17. Ashraf, Junaid, 2022. "Do political instability, financial instability and environmental degradation undermine growth? Evidence from belt and road initiative countries," Journal of Policy Modeling, Elsevier, vol. 44(6), pages 1113-1127.
    18. Sèna Kimm Gnangnon, 2023. "Do unilateral trade preferences help reduce poverty in beneficiary countries?," International Journal of Economic Policy Studies, Springer, vol. 17(1), pages 249-288, February.
    19. Trung V. Vu, 2022. "Does institutional quality foster economic complexity? The fundamental drivers of productive capabilities," Empirical Economics, Springer, vol. 63(3), pages 1571-1604, September.
    20. Viktor Stojkoski & Philipp Koch & Eva Coll & César A. Hidalgo, 2024. "Estimating digital product trade through corporate revenue data," Nature Communications, Nature, vol. 15(1), pages 1-15, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:80:y:2023:i:c:p:347-365. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.