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Global Value Chains, productivity and Technological frontier

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  • Abdoul Karim Théophile Ouedraogo

    (LEDi - Laboratoire d'Economie de Dijon [Dijon] - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE])

Abstract

The paper examines the effects of GVC participation on labour productivity (LP) and total factor productivity (TFP) growth regarding the technology frontier using panel data from 30 countries, 16 sectors over the period 1995-2015. Our estimations using the instrumental variable method (IV) reveal that participation has a positive effect on labour productivity (LP) and total factor productivity (TFP) growth regardless of the proximity to the technological frontier for the sectors in our study. These effects are similar in the manufacturing sector. On the other hand, on the services sector, the results show that participation in GVCs has a negative and significant impact on total factor productivity growth and a positive and significant effect on LP when far from the technological frontier. The manufacturing sector thus seems to benefit more from this integration into GVCs. Furthermore, our results highlight the importance of technological change and international exposure through closeness to the technological frontier on labour productivity and total factor productivity growth.

Suggested Citation

  • Abdoul Karim Théophile Ouedraogo, 2024. "Global Value Chains, productivity and Technological frontier," Post-Print hal-04893414, HAL.
    • Handle: RePEc:hal:journl:hal-04893414
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