scholarly journals FDI, Global Value Chains, and Local Sourcing in Developing Countries

2017 ◽  
Vol 17 (284) ◽  
Author(s):  
Vito Amendolagine ◽  
Andrea Presbitero ◽  
Roberta Rabellotti ◽  
Marco Sanfilippo ◽  
Adnan Seric
Keyword(s):  
Global Value Chains ◽  
Value Chains ◽  
Data Sets ◽  
Host Countries ◽  
African Countries ◽  
Firm Level ◽  
Foreign Investors ◽  
Level Data ◽  
Sub Saharan ◽  
Local Sourcing

The local sourcing of intermediate products is one the main channels for foreign direct investment (FDI) spillovers. This paper investigates whether and how participation and positioning in the global value chains (GVCs) of host countries is associated to local sourcing by foreign investors. Matching two firm-level data sets of 19 Sub-Saharan African countries and Vietnam to country-sector level measures of GVC involvement, we find that more intense GVC participation and upstream specialization are associated to a higher share of inputs sourced locally by foreign investors. These effects are larger in countries with stronger rule of law and better education.

scholarly journals Globally Trading Firms in Canada: Productivity and Global Value Chains

2021 ◽  
Vol 22 (1) ◽  
pp. 1-24
Author(s):  
Ram C. Acharya
Keyword(s):  
Economic Performance ◽  
Productivity Growth ◽  
Labour Productivity ◽  
Global Value Chains ◽  
Value Chains ◽  
Business Sector ◽  
Firm Level ◽  
Labour Productivity Growth ◽  
Level Data ◽  
Capital Intensive

Using firm-level data in Canada from 2002 to 2008, I compare the economic performance of three types of firms: those that both export and import (called globally trading firms—GTFs), exporters-only, and importers-only. The results show that GTFs are more productive, larger, more capital intensive, pay higher wages, trade more goods, and trade with more countries than both types of one-way traders. These premia for GTFs were found even before they turned into GTFs (self-selection). Moreover, even after turning into GTFs, the productivity growth of a subset of them was faster than that of one-way traders. The higher the involvement in global value chains (GVCs), the higher was the performance of the “learning-by-turning GTFs”. The GTFs with higher productivity growth were the ones that imported from multiple countries, not those that imported only from China. By another measure, they were both-in-both GTFs—those that traded both final and intermediate goods, and in both directions (exports and imports). Even though they employed only 10% of Canada’s business sector workforce, they contributed 60% of its labour productivity growth.

scholarly journals Measuring Global Value Chains

2018 ◽  
Vol 10 (1) ◽  
pp. 207-236 ◽  
Author(s):  
Robert C. Johnson
Keyword(s):  
Multinational Firms ◽  
Bilateral Trade ◽  
Value Added ◽  
Global Value Chains ◽  
Value Chains ◽  
Production Networks ◽  
Input Output ◽  
Firm Level ◽  
Level Data ◽  
Production Stages

Recent decades have seen the emergence of global value chains (GVCs), in which production stages for individual goods are broken apart and scattered across countries. Stimulated by these developments, there has been rapid progress in data and methods for measuring GVC linkages. The macro approach to measuring GVCs connects national input–output tables across borders by using bilateral trade data to construct global input–output tables. These tables have been applied to measure trade in value added, the length of and location of producers in GVCs, and price linkages across countries. The micro approach uses firm-level data to document firms’ input sourcing decisions, how import and export participation are linked, and how multinational firms organize their production networks. In this review, I evaluate progress in these two approaches, highlighting points of contact between them and areas that demand further work. I argue that further convergence between these approaches can strengthen both, yielding a more complete empirical portrait of GVCs.

scholarly journals Global Value Chains and Productivity

2020 ◽  
Vol 20 (117) ◽  
Author(s):  
Hang Banh ◽  
Philippe Wingender ◽  
Cheikh Gueye
Keyword(s):  
Small Firms ◽  
Global Value Chains ◽  
Value Chains ◽  
Aggregate Productivity ◽  
Large Firms ◽  
Potential Growth ◽  
Firm Level ◽  
Exporting Firms ◽  
Level Data ◽  
The Impact

The COVID-19 pandemic has led to an unprecedented collapse in global economic activity and trade. The crisis has also highlighted the role played by global value chains (GVC), with countries facing shortages of components vital to everything from health systems to everyday household goods. Despite the vulnerabilities associated with increased interconnectedness, GVCs have also contributed to increasing productivity and long-term growth. We explore empirically the impact of GVC participation on productivity in Estonia using firm-level data from 2000 to 2016. We find that higher GVC participation at the industry level significantly boosts productivity at both the industry and the firm level. Frontier firms, large firms, and exporting firms also benefit more from GVC participation than non-frontier firms, small firms, and non-exporting firms. We also find that GVC participation of downstream industries has a negative correlation with productivity. Frontier firms and large firms benefit more from GVC participation of upstream industries, while non-frontier firms and small firms benefit more from GVC participation of downstream industries. Our results suggest that policies designed to promote participation in GVCs are important to raise aggregate productivity and potential growth in Estonia.

Does the Presence of Foreign Firms Reduce Domestic Firms’ Financial Constraints in Sub-Saharan Africa?†

2019 ◽  
Vol 28 (4) ◽  
pp. 343-370
Author(s):  
Habtamu Tesfaye Edjigu ◽  
Nicholas Sim
Keyword(s):  
Financial Constraints ◽  
Foreign Firm ◽  
Bank Loans ◽  
Sub Saharan Africa ◽  
Foreign Firms ◽  
African Countries ◽  
Firm Level ◽  
Domestic Firms ◽  
Level Data ◽  
Sub Saharan

Abstract Firms in the SSAs (sub-Saharan African countries for short) face severe financial constraints. Because financial markets in the SSAs are underdeveloped, policymakers have sought after the establishment of foreign-owned firms in their countries to help, among others, alleviate the financial constraints faced by domestic firms. However, there is no empirical evidence that speaks to the association between foreign firm presence and domestic firms’ financial constraint. Using firm-level data spanning across 36 SSAs from the World Bank Enterprise Survey, we show that the increase in foreign firm presence can ease the financial constraints of domestic firms in the SSAs. One reason is that foreign-owned firms are not only less financially constrained, they are also less likely to apply for bank loans. Therefore, an increase in foreign firm presence may reduce the competition for loans and ease the financial constraints of domestic firms by improving their borrowing success.

Pre-Entry Experience, Postentry Adaptations, and Internationalization in the African Mobile Telecommunications Industry

2021 ◽  
pp. 1-22
Author(s):  
Mohammad Jahanbakht ◽  
Romel Mostafa ◽  
Francisco Veloso
Keyword(s):  
Low Income ◽  
Telecommunications Industry ◽  
Mobile Telecommunications ◽  
African Countries ◽  
Firm Level ◽  
Operational Conditions ◽  
Adaptive Capabilities ◽  
Level Data ◽  
Start Ups ◽  
Mobile Telecommunications Industry

We study the evolution of the African mobile telecommunications industry from its effective beginning and explore the sources of ownership advantages among indigenous firms, by assembling historical qualitative and quantitative firm-level data. Our historical qualitative findings suggest that a few start-ups gained industry-specific knowledge through their pre-entry experience, directed their postentry development of capabilities toward adaptations to challenging market and operational conditions, and leveraged their adaptive capabilities to enter and compete in other African countries. Using our quantitative panel data, we show that these firms successfully internationalized across the continent. In particular, compared with other start-ups, they had higher rates of foreign entry in African countries that had relatively weaker rule of law, and greater market reach in African countries that had relatively larger low-income consumer segments. These patterns corroborate that their capabilities for overcoming the industry’s challenging market and operational conditions were their key ownership advantages. Through our triangulated analysis, we show that inherited industry knowledge provides a foundation for postentry capability development, and entrepreneurial leadership guides this process to create ownership advantages for regional internationalization.

The Dynamics of the Global Value Chains and Disruptive Technologies

2021 ◽  
pp. 203-217
Author(s):  
Michael Oluwaseun Olomu
Keyword(s):  
Large Population ◽  
Spillover Effect ◽  
Global Value Chains ◽  
Value Chains ◽  
Competitive Advantages ◽  
African Countries ◽  
Disruptive Technologies ◽  
Conceptual Shift ◽  
Innovation Practices

The advents of GVCs and disruptive technologies have provided alternative paths to industrialization and economic development for African countries, and with the transformation to digitalization now well under way, another conceptual shift is required to understand the evolving role of disruptive technologies in GVCs. It is evident that technological breakthroughs in the global markets have a spillover effect in the structural settings of African economies value chains, as lower tariffs and rapid technological changes have fragmented production across borders, but some African countries remain marginalized in GVCs. This study, therefore, attempts to preliminarily explain how African economies and markets capture value from disruptive technologies and create their competitive advantages within the global value chains context from the perspective of business-model innovation practices in African markets. Thus, developing African firms should not ignore those disruptive growth opportunities within the large population of mass customers and non-consumers in emerging economies.

scholarly journals Job Quality, FDI and Institutions in Sub-Saharan Africa: Evidence from Firm-Level Data

2019 ◽  
Vol 31 (5) ◽  
pp. 1287-1317 ◽  
Author(s):  
Sotiris Blanas ◽  
Adnan Seric ◽  
Christian Viegelahn
Keyword(s):  
Job Quality ◽  
Sub Saharan Africa ◽  
Firm Level ◽  
Level Data ◽  
Firm Level Data ◽  
Sub Saharan

scholarly journals Internalizing Global Value Chains: A Firm-Level Analysis

2019 ◽  
Vol 127 (2) ◽  
pp. 508-559 ◽  
Author(s):  
Laura Alfaro ◽  
Pol Antràs ◽  
Davin Chor ◽  
Paola Conconi
Keyword(s):  
Global Value Chains ◽  
Value Chains ◽  
Firm Level ◽  
Level Analysis
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