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Effects of global value chains on economic growth: Are regional trade agreement, financial development, and mobile cellular the mediating channels in ECOWAS?

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  • Essotanam Mamba

Abstract

The ambiguous effect of trade on economic growth is widely investigated, but the specific effect of trade in global value chains (GVCs) and notably their main mediating channels are less explored. Our research analyzes the effects of GVCs on economic growth, identifies growth-enhancing sector(s), and assesses whether regional trade agreement (RTA), financial development, and mobile cellular are the novel mediating channels in the GVCs-growth nexus. We argue that GVCs have direct and indirect effects on growth, and the effect of GVCs varies from one sector to another. Endogeneity issues are controlled by applying the two-stage least squares, fixed effects and generalized method of moments approach on a panel of the Economic Community of West African States (ECOWAS) during 1990-2020. We find the positive effect of GVCs (with the pronounced effect of forward GVC) on growth, but the effect of agricultural GVCs is greater than those of other sectors. Furthermore, our research finds that financial development and mobile cellular are the main mediating channels in the GVCs-growth nexus, while GVCs can be the channel via which RTA affects growth. ECOWAS countries should leverage their participation in GVCs, mainly agricultural and forward GVCs, and support mobile cellular penetration and well-functioning financial systems.

Suggested Citation

  • Essotanam Mamba, 2026. "Effects of global value chains on economic growth: Are regional trade agreement, financial development, and mobile cellular the mediating channels in ECOWAS?," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 23(1), pages 115-156, June.
    • Handle: RePEc:liu:liucej:v:23:y:2026:i:1:p:115-156
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    JEL classification:

    • E61 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Policy Objectives; Policy Designs and Consistency; Policy Coordination
    • F1 - International Economics - - Trade
    • G2 - Financial Economics - - Financial Institutions and Services
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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