IDEAS home Printed from https://ideas.repec.org/a/rfe/zbefri/v40y2022i2p313-327.html
   My bibliography  Save this article

Do ICT and technological development facilitate supply chain trade?

Author

Listed:
  • Petra Adelajda Zaninoviæ

    (University of Rijeka, Faculty of Economics and Business, Rijeka, Croatia)

Abstract

This paper aims to estimate the impact of ICT and technological development of countries on supply chain trade. As proxy measures of supply chain trade, the author applies domestic value added (DVAFX) included in gross-foreign exports, and foreign-value added included in domestic exports (FVA) from the Eora MRIO database while constructing the ICT variable by using confirmatory factor analysis. Furthermore, as a proxy variable for the country’s technological development, the author applies the economic complexity index developed by Harvard’s Growth Lab, conducting her analysis based on the structural gravity model estimated with the Poisson Pseudo-Maximum Likelihood Estimator (PPML). Together with the standard gravity regressors, the model includes the bilateral position of countries in the supply chain. Our panel dataset covers the 2000-2019 period, including 130 world countries. To control for the potential source of endogeneity, the model includes reporter and partner country fixed effects, yearly fixed e fects, and country-pair fixed effects. The results confirm a statistically significant relationship between the country’s technological development and supply-chain trade. Technological development enables a country to produce more complex, higher value-added products and thus to be more upstream positioned in the supply chain. The more upstream the country is in the supply chain, the higher the domestic value added is included in its exports.

Suggested Citation

  • Petra Adelajda Zaninoviæ, 2022. "Do ICT and technological development facilitate supply chain trade?," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 40(2), pages 313-327.
    • Handle: RePEc:rfe:zbefri:v:40:y:2022:i:2:p:313-327
    as

    Download full text from publisher

    File URL: https://www.efri.uniri.hr/upload/1201202201-Zaninovi%C4%87-2022-2.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Pol Antràs & Alonso de Gortari, 2020. "On the Geography of Global Value Chains," Econometrica, Econometric Society, vol. 88(4), pages 1553-1598, July.
    2. Alberto Behar & Anthony J. Venables, 2011. "Transport Costs and International Trade," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 5, Edward Elgar Publishing.
    3. Richard Baldwin & Daria Taglioni, 2006. "Gravity for Dummies and Dummies for Gravity Equations," NBER Working Papers 12516, National Bureau of Economic Research, Inc.
    4. Katja Zajc Kejžar & Èrt Kostevc & Vinko Zaninoviæ, 2016. "The role of regional economic integrations for trade margins: A case of Croatia," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 34(1), pages 11-41.
    5. Daniel Saslavsky & Ben Shepherd, 2014. "Facilitating international production networks: The role of trade logistics," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 23(7), pages 979-999, October.
    6. Antrà s, Pol & Chor, Davin, 2017. "On the Measurement of Upstreamness and Downstreamness in Global Value Chains," CEPR Discussion Papers 12549, C.E.P.R. Discussion Papers.
    7. Marcel P. Timmer & Abdul Azeez Erumban & Bart Los & Robert Stehrer & Gaaitzen J. de Vries, 2014. "Slicing Up Global Value Chains," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 99-118, Spring.
    8. Márquez-Ramos, Laura & Martínez-Zarzoso, Inmaculada, 2010. "The effect of technological innovation on international trade," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-37.
    9. John S. Wilson & Catherine L. Mann & Tsunehiro Otsuki, 2003. "Trade Facilitation and Economic Development: A New Approach to Quantifying the Impact," The World Bank Economic Review, World Bank, vol. 17(3), pages 367-389, December.
    10. Robert Koopman & William Powers & Zhi Wang & Shang-Jin Wei, 2010. "Give Credit Where Credit Is Due: Tracing Value Added in Global Production Chains," NBER Working Papers 16426, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    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. Chiara Bentivogli & Tommaso Ferraresi & Paola Monti & Renato Paniccià & Stefano Rosignoli, 2019. "Italian Regions in Global Value Chains: An Input-Output Approach," Politica economica, Società editrice il Mulino, issue 1, pages 55-94.
    2. Carlo Altomonte & Laura Bonacorsi & Italo Colantobe, 2018. "Trade and Growth in the Age of Global Value Chains," BAFFI CAREFIN Working Papers 1897, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    3. Nenci, Silvia & Fusacchia, Ilaria & Giunta, Anna & Montalbano, Pierluigi & Pietrobelli, Carlo, 2022. "Mapping global value chain participation and positioning in agriculture and food: stylised facts, empirical evidence and critical issues," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 11(2), July.
    4. Davies, Ronald B. & Studnicka, Zuzanna, 2018. "The heterogeneous impact of Brexit: Early indications from the FTSE," European Economic Review, Elsevier, vol. 110(C), pages 1-17.
    5. Chao Wang & Wenyu Zhang & Bing Li, 2023. "Analysis of Country Economic Growth Based on Industries Chain Position," Sustainability, MDPI, vol. 15(21), pages 1-15, November.
    6. Reshef, Ariell & Santoni, Gianluca, 2023. "Are your labor shares set in Beijing? The view through the lens of global value chains," European Economic Review, Elsevier, vol. 155(C).
    7. Maarten Bosker & Bastian Westbrock, 2019. "The network origins of the gains from trade," CESifo Working Paper Series 7552, CESifo.
    8. Patricia Sourdin & Richard Pomfret, 2012. "Trade Facilitation," Books, Edward Elgar Publishing, number 14596.
    9. repec:era:wpaper:dp-2015-49 is not listed on IDEAS
    10. Jan Fagerberg & Bengt-Åke Lundvall & Martin Srholec, 2018. "Global Value Chains, National Innovation Systems and Economic Development," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 533-556, July.
    11. Yan, Bingqian & Xia, Yan & Jiang, Xuemei, 2023. "Carbon productivity and value-added generations: Regional heterogeneity along global value chain," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 111-125.
    12. Hylke Vandenbussche & William Connell & Wouter Simons, 2022. "Global value chains, trade shocks and jobs: An application to Brexit," The World Economy, Wiley Blackwell, vol. 45(8), pages 2338-2369, August.
    13. Abdoulaye Seck, 2017. "How Facilitating Trade would Benefit Trade in Sub-Saharan Africa," Journal of African Development, African Finance and Economic Association (AFEA), vol. 19(1), pages 1-26.
    14. Dutta, Sourish, 2017. "Research Methods of Assessing Global Value Chains," MPRA Paper 106201, University Library of Munich, Germany.
    15. Bernard Hoekman, 2014. "The Bali Trade Facilitation Agreement and Rulemaking in the WTO: Milestone, Mistake or Mirage?," RSCAS Working Papers 2014/102, European University Institute.
    16. Ines Kersan-Škabić & Alen Belullo, 2021. "The Characteristics of Regional Value Chains in the Sector of Chemicals and Pharmaceutical Products in the EU," Economies, MDPI, vol. 9(4), pages 1-24, November.
    17. Ji, Xi & Liu, Yifang & Wu, Guowei & Su, Pinyi & Ye, Zhen & Feng, Kuishuang, 2022. "Global value chain participation and trade-induced energy inequality," Energy Economics, Elsevier, vol. 112(C).
    18. João Amador & Sónia Cabral, 2017. "Networks of Value-added Trade," The World Economy, Wiley Blackwell, vol. 40(7), pages 1291-1313, July.
    19. Federico Carril‐Caccia & Elena Pavlova, 2020. "Mergers and acquisitions & trade: A global value chain analysis," The World Economy, Wiley Blackwell, vol. 43(3), pages 586-614, March.
    20. Márquez-Ramos, Laura & Martínez-Zarzoso, Inmaculada & Suárez-Burguet, Celestino, 2012. "Trade policy versus trade facilitation: An application using good old OLS," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 6, pages 1-38.
    21. João Amador & Sónia Cabral & Rossana Mastrandrea & Franco Ruzzenenti, 2018. "Who’s Who in Global Value Chains? A Weighted Network Approach," Open Economies Review, Springer, vol. 29(5), pages 1039-1059, November.

    More about this item

    Keywords

    ICT; technology; supply chain trade; trade in value-added; PPML;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    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:rfe:zbefri:v:40:y:2022:i:2:p:313-327. 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: Danijela Ujcic (email available below). General contact details of provider: https://edirc.repec.org/data/efrijhr.html .

    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.