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The Importance of Global Value Chains in Developing Countries’ Agricultural Trade Development

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  • Tomasz Białowąs

    (Department of World Economy and European Integration, Institute of Economics and Finance, Faculty of Economics, Maria Curie-Sklodowska University, 20031 Lublin, Poland)

  • Anna Budzyńska

    (Department of Microeconomics and Applied Economics, Institute of Economics and Finance, Faculty of Economics, Maria Curie-Sklodowska University, 20031 Lublin, Poland)

Abstract

The role of global value-added chains is growing in international trade. The development gap between highly developed economies and developing countries means that the only products with which less developed economies can compete on the international arena are agricultural products. Moreover, integration into global value-added chains is an important factor in achieving comparative advantages in trade and improving export competitiveness. The main aim of this article is to assess the impact of integration within global value chains on changes in the comparative advantage of developing countries in the global agricultural trade. The degree of participation of developing countries in global value chains (GVC) was assessed using data from the Trade in Value-added OECD–WTO database (November 2021 edition) by calculating domestic (DVA), foreign value-added (FVA), and revealed comparative advantage (RCA) indexes. The analysis covers the period 1995–2018 and 28 developing economies. The research showed that the foreign value added in the gross exports of agricultural commodities of developing countries was an important factor in strengthening their export position and the importance of integration within global value chains rises with increasing product complexity. In agricultural production, FVA in most developing countries does not have a significant impact on the shaping of the comparative advantage.

Suggested Citation

  • Tomasz Białowąs & Anna Budzyńska, 2022. "The Importance of Global Value Chains in Developing Countries’ Agricultural Trade Development," Sustainability, MDPI, vol. 14(3), pages 1-22, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:3:p:1389-:d:734352
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    References listed on IDEAS

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    1. Neil Foster & Robert Stehrer & Marcel Timmer, 2013. "International fragmentation of production, trade and growth: Impacts and prospects for EU member states," European Economy - Economic Papers 2008 - 2015 484, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
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