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Drivers of productivity change in global value chains: Reallocation vs. innovation

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  • Mundt, Philipp
  • Savin, Ivan

Abstract

We revisit the debate on the role of technological improvement and market share reallocation in determining aggregate productivity gains. Contrary to previous work that neglects dependencies between suppliers in global value chains, we explicitly account for input linkages that impact both channels of productivity improvement. Using sector-level data from the World Input-Output Database, we show that market share reallocation has a markedly larger effect on productivity change than innovation.

Suggested Citation

  • Mundt, Philipp & Savin, Ivan, 2022. "Drivers of productivity change in global value chains: Reallocation vs. innovation," BERG Working Paper Series 179, Bamberg University, Bamberg Economic Research Group.
  • Handle: RePEc:zbw:bamber:179
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    Cited by:

    1. Ivan Savin & Maria Novitskaya, 2023. "Data-driven definitions of gazelle companies that rule out chance: application for Russia and Spain," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 13(3), pages 507-542, September.

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    More about this item

    Keywords

    input-output analysis; market share reallocation; productivity decomposition; production network; technological improvement;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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