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Economic upgrading through global value chain participation : which policies increase the value added gains ?

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  • Kummritz,Victor
  • Taglioni,Daria
  • Winkler,Deborah Elisabeth
  • Kummritz,Victor
  • Taglioni,Daria
  • Winkler,Deborah Elisabeth

Abstract

The emergence of global value chains has opened up new ways to achieve development and industrialization. However, new evidence shows that not all countries have gained from participating in global value chains, and that country-specific characteristics matter for economic upgrading in global value chains. This paper uses two panel data sets of developing and industrialized countries at the sectoral level to relate global value chain participation as a buyer and seller to domestic value added. These are combined with a wide range of policy measures at the country level that can play a role in economic upgrading through global value chains, by targeting global value chain integration or the quality and conditions of input and output factors. First, the study finds that global value chain integration increases domestic value added, especially on the selling side, which holds across all income levels. Second, the results highlight the importance of policy for economic upgrading through global value chain integration. Although the study cannot claim causal evidence, all the assessed policy areas are consistently shown to mediate the effects of global value chains and magnify the gains for domestic value added. Third, a detailed analysis shows that several policy areas mediate the gains from global value chains more through integration as a seller. Finally, the study observes that many of the results are driven by high- and upper-middle-income countries.

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  • Kummritz,Victor & Taglioni,Daria & Winkler,Deborah Elisabeth & Kummritz,Victor & Taglioni,Daria & Winkler,Deborah Elisabeth, 2017. "Economic upgrading through global value chain participation : which policies increase the value added gains ?," Policy Research Working Paper Series 8007, The World Bank.
  • Handle: RePEc:wbk:wbrwps:8007
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    Cited by:

    1. Cédric Durand & David Flacher & Vincent Frigant, 2018. "Étudier les chaînes globales de valeur comme une forme d’organisation industrielle," Revue d'économie industrielle, De Boeck Université, vol. 0(3), pages 13-34.
    2. Chong-Sup Kim & Seungho Lee & Jihyun Eum, 2019. "Taking a Bigger Slice of the Global Value Chain Pie: An Industry-Level Analysis," Working Papers 2019-3, Economic Research Institute, Bank of Korea.
    3. Alberto Criscuolo & Ifeyinwa Uchenna Onugha & Gonzalo Varela, 2014. "Oriental Republic of Uruguay," World Bank Other Operational Studies 30469, The World Bank.
    4. repec:kap:jincot:v:18:y:2018:i:3:d:10.1007_s10842-017-0265-0 is not listed on IDEAS
    5. Gunnella, Vanessa & Al-Haschimi, Alexander & Benkovskis, Konstantins & Chiacchio, Francesco & de Soyres, François & Di Lupidio, Benedetta & Fidora, Michael & Franco-Bedoya, Sebastian & Frohm, Erik & G, 2019. "The impact of global value chains on the euro area economy," Occasional Paper Series 221, European Central Bank.

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