Global value chain participation and its impact on industrial upgrading

Kailan Tian, Erik Dietzenbacher*, Richard Jong-A-Pin

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Participation in global value chains (GVCs) has become a central topic in trade and development policy. It has opened new ways to achieve industrial upgrading. However, some theoretical models suggest that not all countries will upgrade through participation in GVCs. Using panel data from the World Input-Output Database, we examine the effects of backward and forward GVC participation on three dimensions of industrial upgrading (process, product and skill upgrading). We find that backward GVC participation provides more upgrading opportunities for developing countries as it enables a less developed country to import sophisticated inputs. This activates learning through embodied knowledge. In contrast, forward participation has higher level of upgrading effect on developed countries.

Original languageEnglish
Number of pages24
JournalWorld Economy
DOIs
Publication statusE-pub ahead of print - 28-Sep-2021

Keywords

  • global value chain participation
  • industrial upgrading
  • world input-output tables
  • INNOVATION
  • ECONOMICS

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