IDEAS home Printed from https://ideas.repec.org/p/sru/ssewps/2019-10.html
   My bibliography  Save this paper

Trade Specialisation and Performance in Global Value Chains

Author

Listed:
  • Filippo Bontadini

    (Science Policy Research Unit (SPRU) University of Sussex, UK; OFCE-SciencesPo, Nice)

Abstract

This paper investigates whether trade specialisation explains economies’ trade performance within a Global Value Chain (GVC) context. We consider trade specialisation in natural resources, high and low tech manufacturing and business services, before and after the financial crisis. The aimed contribution of this paper is to shed light on the effects of trade specialisation as measured in domestic value added embodied in exports rather than gross exports. We add to the literature on GVCs by: (i) studying the role of the domestic productive structure in countries’ trade specialisation and performance, (ii) accounting for the rate of changes in trade specialisation as affecting GVC performance. We employ Balassa indexes based on value added flows in a GMM dynamic panel framework. We find that trade specialisation in low-tech manufacturing and natural resources have a negative impact on value added exported by countries. High-tech manufacturing and knowledge intensive services exhibit a positive effect during the crisis period. We discuss these findings in relation to the recent debates on the role of manufacturing and premature de-industrialisation in developing countries.

Suggested Citation

  • Filippo Bontadini, 2019. "Trade Specialisation and Performance in Global Value Chains," SPRU Working Paper Series 2019-10, SPRU - Science Policy Research Unit, University of Sussex Business School.
    • Handle: RePEc:sru:ssewps:2019-10
    as

    Download full text from publisher

    File URL: https://www.sussex.ac.uk/webteam/gateway/file.php?name=2019-10-swps-bontadini.pdf&site=25
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Robert C. Johnson, 2018. "Measuring Global Value Chains," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 207-236, August.
    2. Robert Koopman & Zhi Wang & Shang-Jin Wei, 2014. "Tracing Value-Added and Double Counting in Gross Exports," American Economic Review, American Economic Association, vol. 104(2), pages 459-494, February.
    3. Rinaldo Evangelista & Matteo Lucchese & Valentina Meliciani, 2015. "Business services and the export performances of manufacturing industries," Journal of Evolutionary Economics, Springer, vol. 25(5), pages 959-981, November.
    4. Cesar A. Hidalgo & Ricardo Hausmann, 2009. "The Building Blocks of Economic Complexity," Papers 0909.3890, arXiv.org.
    5. Richard Baldwin & Javier Lopez-Gonzalez, 2015. "Supply-chain Trade: A Portrait of Global Patterns and Several Testable Hypotheses," The World Economy, Wiley Blackwell, vol. 38(11), pages 1682-1721, November.
    6. Anthony P. Thirlwall, 2011. "The Balance of Payments Constraint as an Explanation of International Growth Rate Differences," PSL Quarterly Review, Economia civile, vol. 64(259), pages 429-438.
    7. Kim, Linsu, 1980. "Stages of development of industrial technology in a developing country: A model," Research Policy, Elsevier, vol. 9(3), pages 254-277, July.
    8. Marin, Dalia, 1992. "Is the Export-Led.Growth Hypothesis Valid for Industrialized Countries?," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 678-688, November.
    9. Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
    10. Baldwin, Richard, 2012. "Global supply chains: Why they emerged, why they matter, and where they are going," CEPR Discussion Papers 9103, C.E.P.R. Discussion Papers.
    11. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, vol. 87(1), pages 115-143, August.
    12. Fagerberg, Jan, 1988. "International Competitiveness," Economic Journal, Royal Economic Society, vol. 98(391), pages 355-374, June.
    13. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    14. David I. Harvey & Neil M. Kellard & Jakob B. Madsen & Mark E. Wohar, 2010. "The Prebisch-Singer Hypothesis: Four Centuries of Evidence," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 367-377, May.
    15. Francisco L. Rivera-Batiz & Luis A. Rivera-Batiz, 2018. "Economic Integration and Endogenous Growth," World Scientific Book Chapters, in: Francisco L Rivera-Batiz & Luis A Rivera-Batiz (ed.), International Trade, Capital Flows and Economic Development, chapter 1, pages 3-32, World Scientific Publishing Co. Pte. Ltd..
    16. Gisela Di Meglio & Jorge Gallego & Andrés Maroto & Maria Savona, 2018. "Services in Developing Economies: The Deindustrialization Debate in Perspective," Development and Change, International Institute of Social Studies, vol. 49(6), pages 1495-1525, November.
    17. Marcel P. Timmer & Gaaitzen J. de Vries, 2009. "Structural change and growth accelerations in Asia and Latin America: a new sectoral data set," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 3(2), pages 165-190, June.
    18. El-hadj M. Bah, 2011. "Structural Transformation Paths Across Countries," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(0), pages 5-19, May.
    19. Javier López González & Valentina Meliciani & Maria Savona, 2019. "When Linder meets Hirschman: inter-industry linkages and global value chains in business services," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 28(6), pages 1555-1586.
    20. De Backer, Koen & Miroudot, Sébastien, 2014. "Mapping global value chains," Libros de la CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 37176, May.
    21. Guerrieri, Paolo & Meliciani, Valentina, 2005. "Technology and international competitiveness: The interdependence between manufacturing and producer services," Structural Change and Economic Dynamics, Elsevier, vol. 16(4), pages 489-502, December.
    22. Keun Lee & Mansoo Jee & Jong-Hak Eun, 2011. "Assessing China's Economic Catch-Up at the Firm Level and Beyond: Washington Consensus, East Asian Consensus and the Beijing Model," Industry and Innovation, Taylor & Francis Journals, vol. 18(5), pages 487-507.
    23. repec:dgr:rugggd:gd-149 is not listed on IDEAS
    24. Baldwin, Richard & Robert-Nicoud, Frédéric, 2014. "Trade-in-goods and trade-in-tasks: An integrating framework," Journal of International Economics, Elsevier, vol. 92(1), pages 51-62.
    25. Banga, Rashmi, 2014. "Linking into Global Value Chains Is Not Sufficient: Do You Export Domestic Value Added Contents?," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 29, pages 267-297.
    26. Lee, Jim, 2011. "Export specialization and economic growth around the world," Economic Systems, Elsevier, vol. 35(1), pages 45-63, March.
    27. Ricardo Hausmann & César Hidalgo, 2011. "The network structure of economic output," Journal of Economic Growth, Springer, vol. 16(4), pages 309-342, December.
    28. Dani Rodrik, 2013. "Unconditional Convergence in Manufacturing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(1), pages 165-204.
    29. Fagerberg, Jan, 1988. "International Competitiveness: Errata," Economic Journal, Royal Economic Society, vol. 98(393), pages 1203-1203, December.
    30. Daniel Lederman & William F. Maloney, 2012. "Does What You Export Matter? In Search of Empirical Guidance for Industrial Policies," World Bank Publications - Books, The World Bank Group, number 9371.
    31. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    32. Uchida, Yuichiro & Cook, Paul, 2005. "The Transformation of Competitive Advantage in East Asia: An Analysis of Technological and Trade Specialization," World Development, Elsevier, vol. 33(5), pages 701-728, May.
    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. Maria Savona, 2021. "Revisiting High Development Theory to Explain Upgrading Prospects in Business Services Global Value Chains," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 33(2), pages 206-226, April.
    2. Hidalgo, César A., 2023. "The policy implications of economic complexity," Research Policy, Elsevier, vol. 52(9).
    3. Basu, Anwesha & Marjit, Sugata & Veeramani, C., 2024. "Growth gains from offshore outsourcing," Journal of Policy Modeling, Elsevier, vol. 46(1), pages 90-112.
    4. Elodie Mania & Arsène Rieber, 2019. "Product export diversification and sustainable economic growth in developing countries," Post-Print hal-02297128, HAL.
    5. Jose Luis da Costa Oreiro & Stefan Wilson d'Amato & Luciano Luiz Manarin D'Agostini & Paulo Sergio de Oliveira Simoes Gala, 2022. "Measuring the technological backwardness of middle-and low-income countries: The employment quality gap and its relationship with the per capita income gap," PSL Quarterly Review, Economia civile, vol. 75(301), pages 139-159.
    6. Jona-Lasinio, Cecilia & Manzocchi, Stefano & Meliciani, Valentina, 2019. "Knowledge based capital and value creation in global supply chains," Technological Forecasting and Social Change, Elsevier, vol. 148(C).
    7. Mania, Elodie & Rieber, Arsène, 2019. "Product export diversification and sustainable economic growth in developing countries," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 138-151.
    8. Naima Chrid & Sami Saafi & Mohamed Chakroun, 2021. "Export Upgrading and Economic Growth: a Panel Cointegration and Causality Analysis," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(2), pages 811-841, June.
    9. Sèna Kimm Gnangnon, 2023. "Do unilateral trade preferences help reduce poverty in beneficiary countries?," International Journal of Economic Policy Studies, Springer, vol. 17(1), pages 249-288, February.
    10. Trung V. Vu, 2022. "Does institutional quality foster economic complexity? The fundamental drivers of productive capabilities," Empirical Economics, Springer, vol. 63(3), pages 1571-1604, September.
    11. Sena Kimm Gnangnon, 2022. "Effect of economic complexity on services export diversification: do foreign direct investment inflows matter?," International Journal of Development Issues, Emerald Group Publishing Limited, vol. 21(3), pages 413-437, June.
    12. Filippo Bontadini & Rinaldo Evangelista & Valentina Meliciani & Maria Savona, 2019. "Integration in Global Value Chains and Employment in Europe," SPRU Working Paper Series 2019-16, SPRU - Science Policy Research Unit, University of Sussex Business School.
    13. Di Meglio, Gisela & Gallego, Jorge, 2022. "Disentangling services in developing regions: A test of Kaldor's first and second laws," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 221-229.
    14. Ribeiro, Rafael S.M. & McCombie, John S.L. & Lima, Gilberto Tadeu, 2020. "Does real exchange rate undervaluation really promote economic growth?," Structural Change and Economic Dynamics, Elsevier, vol. 52(C), pages 408-417.
    15. Gertjan Dordmond & Heder Carlos Oliveira & Ivair Ramos Silva & Julia Swart, 2021. "The complexity of green job creation: An analysis of green job development in Brazil," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 723-746, January.
    16. Amable, Bruno, 2000. "International specialisation and growth," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 413-431, December.
    17. Isaac Ketu & Paul Ningaye, 2024. "Sectoral Employment Shares Shape Economic Complexity: Empirical Evidence from African Countries," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(2), pages 168-187, May.
    18. Miguel León-Ledesma, 2000. "R&D Spillovers and Export Performance: Evidence from the OECD Countries," Studies in Economics 0014, School of Economics, University of Kent.
    19. Vrh, Nataša, 2015. "Pay-off to Participation in Global Value Chains: How Much are New EU Member States Lagging behind the Rest of EU Countries in Terms of Domestic Value Added in Exports?," MPRA Paper 67805, University Library of Munich, Germany.
    20. Isaac Ketu & Arsene Mouongue Kelly & Jules-Eric Tchapchet Tchouto, 2024. "Does economic complexity reduce the size of the shadow economy in African countries?," SN Business & Economics, Springer, vol. 4(1), pages 1-27, January.

    More about this item

    Keywords

    Global Value Chains; Trade Specialisation; KIBS; Input-Output.;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:sru:ssewps:2019-10. 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: University of Sussex Business School Communications Team (email available below). General contact details of provider: https://edirc.repec.org/data/spessuk.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.