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Institutional drivers of global value chains participation in African countries

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  • Magbondé, Kadoukpè Gildas

Abstract

Despite the expansion of global value chains (GVCs) over the last three decades, African countries trail the other developing regions in terms of GVC integration. Yet, the drivers of African countries' GVC participation are not well understood compared to developed countries. The current paper fills this knowledge gap by providing empirical evidence of the institutional drivers of GVC participation in Africa. It uses the instrumental variable approach based on a panel dataset of 37 African countries spanning the period 2002-2018 to examine the impacts institutions have on total, backward, forward GVCs as well as GVC position. Though no significant effect is recorded with respect to total GVC participation, the instrumental-variable estimates suggest that upgraded institutions encourage backward GVCs and reduce both forward GVCs and upstreamness. For a successful transition from upstream stages of GVCs, African countries must consider strengthening their political and economic institutions.

Suggested Citation

  • Magbondé, Kadoukpè Gildas, 2025. "Institutional drivers of global value chains participation in African countries," Sustainable Global Supply Chains Discussion Papers 7, Research Network Sustainable Global Supply Chains.
    • Handle: RePEc:zbw:sgscdp:314433
    DOI: 10.57671/sgscdp-2507
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    More about this item

    Keywords

    Institutions; global value chains; African countries and instrumental variable approach;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • E02 - Macroeconomics and Monetary Economics - - General - - - Institutions and the Macroeconomy

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