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The Impact of Structural Transformation on Global Value Chains in the MENA Countries

Author

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  • Frikha Nihel

    (University of Sfax, Faculty of Economics and Management, Airport Road Km 4, 3018 Sfax, Tunisia)

  • Gabsi Foued Badr

    (University of Sfax, Faculty of Economics and Management, Airport Road Km 4, 3018 Sfax, Tunisia)

Abstract

Several studies on economic transition propose that structural change in developing countries, that involves reallocating from less productive to more productive sectors, might enhance participation in global value chains (GVCs). However, there is a lack of empirical work on this claim. This study explores the factors affecting global value chain (GVC) participation in the Middle East and North Africa (MENA) region while considering structural transformation from 2000 to 2018. By applying the system GMM empirical research method, we found that structural change significantly contributes to facilitating the position of MENA economies under consideration. Specifically, the service and industry sectors play pivotal roles in these countries. This study also postulates that if we want to strengthen the participation of companies in GVCs, access to the internet, and a high level of education tertiary are necessary Also, environment and policies conducive to investment and direct investment abroad are important. The study posits positive commercial and financial links, and population size as important factors in promoting this position.

Suggested Citation

  • Frikha Nihel & Gabsi Foued Badr, 2024. "The Impact of Structural Transformation on Global Value Chains in the MENA Countries," Naše gospodarstvo/Our economy, Sciendo, vol. 70(2), pages 1-11.
    • Handle: RePEc:vrs:ngooec:v:70:y:2024:i:2:p:1-11:n:1001
    DOI: 10.2478/ngoe-2024-0007
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    References listed on IDEAS

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    1. Chenery, Hollis & Taylor, Lance, 1968. "Development Patterns: Among Countries And Over Time," Center for International Affairs (CIA) Archive 294545, Harvard University, Center for International Affairs.
    2. Ines Kersan-Škabić, 2019. "The drivers of global value chain (GVC) participation in EU member states," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 1204-1218, January.
    3. Abdoulganiour Almame Tinta, 2017. "The determinants of participation in global value chains: The case of ECOWAS," Cogent Economics & Finance, Taylor & Francis Journals, vol. 5(1), pages 1389252-138, January.
    4. Gildas Deudibe & Joshua Merfeld & Justin Ndoutamou & David Newhouse, 2020. "Structural Transformation in Sub-Saharan Africa," World Bank Publications - Reports 33327, The World Bank Group.
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    More about this item

    Keywords

    Global Value Chains; GMM; MENA countries; Structural transformation;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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