Global Value Chain (GVC) participation is typically associated with a productivity premium, yet similar firms can benefit differently depending on the possibility for creating production linkages offered by their countries’ involvement in trade. We show that country-sector intermediate trade network centrality is also positively associated with firms’ productivity, suggesting that the connectivity of the business environment may enhance productivity on top of direct firm-level involvement in GVCs. For a large cross-section of MENA countries included in the World Bank Enterprise Surveys (WBES), we find evidence of productivity premia using several firm-level GVC participation measures and network centrality indicators constructed from the EORA input-output tables. Centrality is also positively associated with firms’ productivity, adding to the direct effect of GVC participation. Our results are confirmed using OLS, multi-level models, Propensity Score Matching techniques, and a Shift-Share instrumental variable approach which help addressing endogeneity issues.
Trade Networks and the Productivity of MENA Firms in Global Value Chains / Giovannetti, Giorgia, Ayadi, Rym, Marvasi, Enrico, Zhaki Chahir. - In: STRUCTURAL CHANGE AND ECONOMIC DYNAMICS. - ISSN 0954-349X. - STAMPA. - 69:(2024), pp. 10-23. [10.1016/j.strueco.2023.11.014]
Trade Networks and the Productivity of MENA Firms in Global Value Chains
Giovannetti GiorgiaWriting – Original Draft Preparation
;Marvasi EnricoWriting – Original Draft Preparation
;
2024
Abstract
Global Value Chain (GVC) participation is typically associated with a productivity premium, yet similar firms can benefit differently depending on the possibility for creating production linkages offered by their countries’ involvement in trade. We show that country-sector intermediate trade network centrality is also positively associated with firms’ productivity, suggesting that the connectivity of the business environment may enhance productivity on top of direct firm-level involvement in GVCs. For a large cross-section of MENA countries included in the World Bank Enterprise Surveys (WBES), we find evidence of productivity premia using several firm-level GVC participation measures and network centrality indicators constructed from the EORA input-output tables. Centrality is also positively associated with firms’ productivity, adding to the direct effect of GVC participation. Our results are confirmed using OLS, multi-level models, Propensity Score Matching techniques, and a Shift-Share instrumental variable approach which help addressing endogeneity issues.File | Dimensione | Formato | |
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