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The Capabilities Driving Participation in Global Value Chains

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  • Vilas Pathikonda

    () (World Bank, 1818 H Street, NW Washington, DC 20433, USA)

  • Thomas Farole

    () (World Bank, 1818 H Street, NW Washington, DC 20433, USA)

Abstract

Global value chains (GVCs) have altered the nature of global trade and offer significant opportunities for developing countries to expand exports, access technology, and raise productivity. Recent literature has pointed to a range of underlying characteristics that may drive participation in GVCs. Using a modified factor-content methodology, this paper shows that proximity to markets, efficient logistics, and strength of institutions are among the most important capabilities. However, the paper also shows that each sector has a unique mix of capability requirements. The paper applies the methodology to Southern African Customs Union countries, and demonstrates that, by filling gaps in underlying capabilities, these countries could increase participation in certain GVC sectors.

Suggested Citation

  • Vilas Pathikonda & Thomas Farole, 2017. "The Capabilities Driving Participation in Global Value Chains," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 1-26, February.
    • Handle: RePEc:wsi:jicepx:v:08:y:2017:i:01:n:s1793993317500065
    DOI: 10.1142/S1793993317500065
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    References listed on IDEAS

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    1. Bianka Dettmer, 2014. "International Service Transactions: Is Time a Trade Barrier in a Connected World?," International Economic Journal, Taylor & Francis Journals, vol. 28(2), pages 225-254, June.
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