Opening and linking up: Firms, global value chains and productivity in Latin America
Pierluigi Montalbano, Silvia Nenci & Carlo Pietrobelli
#2017-030
This work explores the relationship between exports, Global Value
Chains' (GVCs) participation and position, and firms' productivity. To
this aim, we combine the most recent World Bank Enterprise Survey in
Latin American and Caribbean (LAC) countries with the OECD-WTO trade in
value added data. To explore the above relationship we adopt an extended
version of the standard Cobb-Douglas output function including
indicators of export performance and GVCs. We control for heterogeneity
among firms (by country, region, and industry), sample selection, firms'
characteristics and reverse causality. Our empirical outcomes confirm
the presence of a positive relationship between participation in
international activities and firm performance. They also show that both
participation in GVCs and position within GVCs matter. These findings
have strong policy implications and may help policymakers in choosing
the best policy options to enhance the link between GVCs integration and
firms' productivity.
Keywords: Firm productivity, Exports, Trade in Value added, Global Value
Chains, learning by supplying
JEL Classification: F14, F61, D24, L22, O54