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Does the Complexity of GVC Participation Matter for Productivity and Output Growth?

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  • Halit Yanikkaya

    (Gebze Technical University)

  • Abdullah Altun

    (Gebze Technical University)

  • Pınar Tat

    (Gebze Technical University)

Abstract

This paper investigates the determinants of total factor productivity and income growth by taking into account both the position of the industry in the global value chain and the complexity of participation for the period of 1996–2009 for 40 developed and developing countries. Our estimation results clearly show that while all measures of forward GVC participations raise the total factor productivity growth of manufacturing industries, there is no effect of participation into GVCs on the productivity of services sectors. Almost all measures of backward and forward GVC substantially promote the output growth of manufacturing and services industries. These significant results provide strong evidence for the learning by trading hypothesis and indicate the importance of deeper involvement into GVCs for higher sectoral productivity. Substantial evidence for the positive impact of importing and exporting intermediates, participating in GVCs, on sectoral performance imply that the successes of industries highly depend on their efficient integration in the global production process.

Suggested Citation

  • Halit Yanikkaya & Abdullah Altun & Pınar Tat, 2022. "Does the Complexity of GVC Participation Matter for Productivity and Output Growth?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 34(4), pages 2038-2068, August.
    • Handle: RePEc:pal:eurjdr:v:34:y:2022:i:4:d:10.1057_s41287-021-00452-7
    DOI: 10.1057/s41287-021-00452-7
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    Cited by:

    1. Huang, Xiaobing & Xie, Jiawei, 2024. "The impact of input efficiency on the value chain embeddedness of rare earth enterprises," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 604-616.
    2. Zezhong Zhao & Guifu Gao, 2024. "The Impact of Digital Trade on China’s Position in the GVC: An Empirical Analysis Based on Sino-Russian Cross-Border Panel Data," Sustainability, MDPI, vol. 16(13), pages 1-22, June.
    3. Can Li & Qi He & Han Ji & Shengguo Yu & Jiao Wang, 2023. "Reexamining the Impact of Global Value Chain Participation on Regional Economic Growth: New Evidence Based on a Nonlinear Model and Spatial Spillover Effects with Panel Data from Chinese Cities," Sustainability, MDPI, vol. 15(18), pages 1-31, September.
    4. D. Dessì & R. Paci, 2023. "The impact of Global Value Chains participation on countries' productivity," Working Paper CRENoS 202305, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

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    More about this item

    Keywords

    Simple/complex GVC participation; Position index; Total factor productivity; Sectoral output growth;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F68 - International Economics - - Economic Impacts of Globalization - - - Policy
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy

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