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Opening and linking up: firms, GVCs, and productivity in Latin America

Author

Listed:
  • Pierluigi Montalbano

    (Sapienza University of Rome
    University of Sussex)

  • Silvia Nenci

    (University of Roma Tre)

  • Carlo Pietrobelli

    (University of Roma Tre
    UNU-MERIT)

Abstract

This work explores the relationship between exports, global value chains (GVCs)’ participation and position, and firms’ productivity. To this aim, we combine the most recent World Bank Enterprise Survey in Latin American and Caribbean (LAC) countries with the Organisation for Economic Co-operation and Development and World Trade Organization trade in value-added data. To explore the above relationship, we adopt an extended version of the standard Cobb-Douglas output function including indicators of export performance and GVCs. We control for heterogeneity among firms (by country, region, and industry), sample selection, firms’ characteristics, and reverse causality. Our empirical outcomes confirm the presence of a positive relationship between participation in international activities and firm performance. They also show that both participation in GVCs and position within GVCs matter. These findings have strong policy implications and may help policymakers in choosing the best policy options to enhance the link between GVCs’ integration and firms’ productivity.

Suggested Citation

  • Pierluigi Montalbano & Silvia Nenci & Carlo Pietrobelli, 2018. "Opening and linking up: firms, GVCs, and productivity in Latin America," Small Business Economics, Springer, vol. 50(4), pages 917-935, April.
  • Handle: RePEc:kap:sbusec:v:50:y:2018:i:4:d:10.1007_s11187-017-9902-6
    DOI: 10.1007/s11187-017-9902-6
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    4. Ketan Reddy & Radeef Chundakkadan & Subash Sasidharan, 2021. "Firm innovation and global value chain participation," Small Business Economics, Springer, vol. 57(4), pages 1995-2015, December.
    5. Akçomak, Ibrahim Semih & Bürken, Serkan, 2019. "The middle-technology trap: The case of the automotive industry in Turkey," MERIT Working Papers 2019-006, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Ms. Faezeh Raei & Borislava Mircheva & Anna Ignatenko, 2019. "Global Value Chains: What are the Benefits and Why Do Countries Participate?," IMF Working Papers 2019/018, International Monetary Fund.

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