## Global Value Chains: What are the Benefits and Why Do Countries Participate?

_IMF Working Papers, January 18, 2019_

## Source details

**Canonical URL:** [Global Value Chains: What are the Benefits and Why Do Countries Participate?](https://www.imf.org/en/publications/wp/issues/2019/01/18/global-value-chains-what-are-the-benefits-and-why-do-countries-participate-46505)

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## Bibliographic details
- Authors: Faezeh Raei, Anna Ignatenko
- Published: January 18, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484392928.001

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### Summary and scope
- Over the last two decades, world trade and production have become increasingly organized around global value chains (GVC).
- The study uses the Eora MRIO database to compute different measures of GVC participation for 189 countries and to illustrate global patterns of supply chains and their evolution over time.
- The paper aims to assess empirical importance of supply chains and channels through which GVC participation affects countries.

### Empirical approach and data
- Data source: Eora MRIO database.
- Coverage: 189 countries.
- Focus: measures of GVC participation, global patterns, evolution over time, and econometric analysis linking GVC-related trade to income per capita and productivity.

### Main findings
- GVC-related trade, rather than conventional trade, has a positive impact on income per capita and productivity.
- There is large heterogeneity in gains from GVC participation; gains appear more significant for upper-middle and high-income countries.
- “Moving up” to more high-tech sectors while participating in major supply chains does take place but is not universal, suggesting other factors matter.
- The study confirms findings from the standard gravity literature for GVC trade.

### Determinants of GVC participation
- Institutional features are highlighted as key determinants of GVC participation:
  - Contract enforcement.
  - Quality of infrastructure.

### Policy-relevant implications (implicit from findings)
- Strengthening institutional features such as contract enforcement can support greater GVC participation.
- Improving infrastructure quality can facilitate integration into GVCs.
- Policies aimed at enabling movement into higher-technology sectors may be necessary but not sufficient, given that upward movement is not universal and other factors matter.

### Metadata and publication identifiers
- Authors: Faezeh Raei, Anna Ignatenko
- Date: January 18, 2019
- Pages: 31
- Series: Working Paper No. 2019/018
- Issue: 018
- DOI: https://doi.org/10.5089/9781484392928.001
- ISBN: 9781484392928
- ISSN: 1018-5941

*Source: IMF Working Paper "Global Value Chains: What are the Benefits and Why Do Countries Participate?"*

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## Content in this bundle

- **Global Value Chains: What are the Benefits and Why Do Countries Participate?, WP/19/18, January 2019**
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_Source: https://www.imf.org/en/publications/wp/issues/2019/01/18/global-value-chains-what-are-the-benefits-and-why-do-countries-participate-46505_