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Does vertical specialization increase productivity ?

Author

Listed:
  • Constantinescu,Ileana Cristina
  • Mattoo,Aaditya
  • Ruta,Michele
  • Constantinescu,Ileana Cristina
  • Mattoo,Aaditya
  • Ruta,Michele

Abstract

This paper investigates the impact of global value chain participation on productivity, using data on trade in value added from the World Input-Output Database. The results based on a panel estimation covering 13 sectors in 40 countries over 15 years suggest that participation in global value chains is a significant driver of labor productivity. Backward participation in global value chains, that is, the use of imported inputs to produce for exports, emerges as particularly important. An increase by 10 percent in the level of global value chain participation increased average productivity by close to 1.7 percent.

Suggested Citation

  • Constantinescu,Ileana Cristina & Mattoo,Aaditya & Ruta,Michele & Constantinescu,Ileana Cristina & Mattoo,Aaditya & Ruta,Michele, 2017. "Does vertical specialization increase productivity ?," Policy Research Working Paper Series 7978, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7978
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