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Do Global Value Chains Enhance Economic Upgrading? A Long View

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  • Stefan Pahl
  • Marcel P. Timmer

Abstract

Exporting through global value chains (GVCs) has recently been highlighted as a panacea for weak industrialisation trends in the South. We study the long-run effects of GVC participation for a large set of countries between 1970 and 2008. We find strong evidence for the positive effects on productivity growth in the formal manufacturing sector. This effect is stronger when the gap with the global productivity frontier is larger. However, we find no evidence for a positive effect on employment generation. These findings also hold in analyses of sub-sets of countries and industries and are robust to the inclusion of non-manufacturing employment.

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  • Stefan Pahl & Marcel P. Timmer, 2020. "Do Global Value Chains Enhance Economic Upgrading? A Long View," Journal of Development Studies, Taylor & Francis Journals, vol. 56(9), pages 1683-1705, July.
    • Handle: RePEc:taf:jdevst:v:56:y:2020:i:9:p:1683-1705
    DOI: 10.1080/00220388.2019.1702159
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