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Are global value chains for sale? On business-state relations in the MENA region

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  • Aboushady, Nora
  • Zaki, Chahir

Abstract

We use new data on political connections from the World Bank Enterprise Surveys to examine the impact of connections on firms' participation in global value chains (GVCs) for six MENA countries (Morocco, Tunisia, Egypt, the West Bank and Gaza, Jordan, and Lebanon). In addition to political connections, we construct several measures of "political influence" based on available data on lobbying and grand corruption. We also explore whether political connections help firms overcome barriers to trade and investment and increase their participation in GVCs at the extensive and intensive margins. Our findings suggest that political connections do matter for firms' GVC participation. The impact is more pronounced for firms that combine political connections with informal payments to influence policymaking. Our findings on the significance of trade and investment barriers for GVC participation for different categories of firms' political influence are - however - inconclusive.

Suggested Citation

  • Aboushady, Nora & Zaki, Chahir, 2023. "Are global value chains for sale? On business-state relations in the MENA region," IDOS Discussion Papers 17/2023, German Institute of Development and Sustainability (IDOS).
    • Handle: RePEc:zbw:diedps:282986
    DOI: 10.23661/idp17.2023
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    More about this item

    Keywords

    GVCs; political connections; bribes; MENA region;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • P00 - Political Economy and Comparative Economic Systems - - General - - - General

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    This paper has been announced in the following NEP Reports:

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