The Capabilities Driving Participation in Global Value Chains
Global value chains have altered the nature of global trade and offer significant opportunities for developing countries to expand exports, access technology, and raise productivity. Policy makers rightly seek to understand what it takes to partici...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/08/26725130/capabilities-driving-participation-global-value-chains http://hdl.handle.net/10986/25049 |
| Summary: | Global value chains have altered the
nature of global trade and offer significant opportunities
for developing countries to expand exports, access
technology, and raise productivity. Policy makers rightly
seek to understand what it takes to participate in global
value chains. In practice, this means understanding what it
takes to attract lead firms and upgrade to higher
value-added activities. Recent literature has pointed to a
range of underlying characteristics that may drive
participation in global value chains. Using a modified
factor-content methodology, this paper shows that proximity
to markets, efficient logistics, and strength of
institutions are among the most important capabilities.
However, the paper also shows that each sector has a unique
mix of capability requirements. Fixed structural
characteristics limit the range of sectoral possibilities
for a given country, but, by reducing policy-related gaps, a
country may be able to increase its competitiveness for
participating in global value chains. The paper applies the
methodology to Southern African Customs Union countries, and
demonstrates that, by filling gaps in underlying
capabilities, these countries could increase participation
in certain global value chain sectors. |
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