A Portrait of Firms Participating in Global Value Chains

This paper presents new stylized facts on developing-nation firms that both import and export, drawing on data from the World Bank's Enterprise Surveys. Using a sample of 124 developing nations, I show that such two-way trading firms, a proxy for global value chains (GVC) participation, are more likely to run training programs, use foreign-licensed technology, possess quality certifications, and communicate with customers and suppliers via the internet. Using the same sample, I also show that local suppliers, i.e. non-trading domestic firms, are more likely to engage in internet-based communication, and hold quality certificates and licences to foreign technology for stronger downstream input-output linkages with two-way trading firms. Overall, these results suggest that the fragmentation of production processes, both internationally and domestically, have significantly affected firms' characteristics in developing and emerging economies.