Research

Journal publications

"Jobs and Productivity Growth in Global Value Chains: New Evidence for Twenty-five Low- and Middle-Income Countries" (with Marcel P. Timmer, Reitze Gouma, Jop Woltjer). World Bank Economic Review (2022), see the data and replication here.

Using newly developed data, the evolution of job and productivity growth in global value chains (GVCs) is analysed for twenty-five low- and middle-income countries. GVC jobs are found to be more productive than non-GVC jobs. Their share in the total labor force is small, in particular for low-income countries. Growth in GVC jobs varies widely across countries in the period 2000-14. Part of this can be accounted for by differences in the type of consumer market served. A bigger part is accounted for by the speed with which countries expand activities within supply chains, measured as shares in GVC value added. Expansion in GVCs is positively correlated with labor productivity across countries as well as over time within detailed GVCs.

Cross-country relation between productivity and value added shares in GVCs

"Cling Together, Swing Together: The Contagious Effects of COVID-19 on Developing Countries Through Global Value Chainsa" (with Clara Brandi, Jakob Schwab, Frederik Stender). The World Economy (2021).

This paper aims at estimating the economic vulnerability of developing countries to disruptions in global value chains (GVCs) due to the COVID‐19 pandemic. It uses trade in value added data for a sample of 12 developing countries in sub‐Saharan Africa, Asia and Latin America to assess their dependence on demand and supply from the three main hubs China, Europe, and North America. Using first estimates on COVID‐19‐induced changes in final demand and production, we obtain an early projection of the GDP effect during the lockdowns that runs through trade in GVCs. Our estimates reveal that adverse demand‐side effects reduce GDP up to 5.4 percent, and that collapsing foreign supply puts an even larger share of countries’ GDP at risk. Overall, we confirm conjecture that the countries most affected are those highly integrated in GVCs (South‐East Asian countries). We argue, however, that these countries also benefit from a well‐diversified portfolio of foreign suppliers and demand destinations, possibly leading to a cushioning of economic downswing because COVID‐19 stroke major hubs at different times.

"Do Global Value Chains Enhance Economic Upgrading? A Long View" (with Marcel P. Timmer). Journal of Development Studies (2020).

Exporting through global value chains (GVCs) has recently been highlighted as a panacea for weak industrialisation trends in the South. We study the long-run effects of GVC participation for a large set of countries between 1970 and 2008. We find strong evidence for the positive effects on productivity growth in the formal manufacturing sector. This effect is stronger when the gap with the global productivity frontier is larger. However, we find no evidence for a positive effect on employment generation. These findings also hold in analyses of sub-sets of countries and industries and are robust to the inclusion of non-manufacturing employment.

Employment growth by level of GVC participation

"Patterns of Vertical Specialisation in Trade: Long-Run Evidence for 91 countries" (with Marcel P. Timmer). Review of World Economics (2019).

We estimate the domestic value-added content in exports of manufacturing goods (VAX-D ratio) for 91 countries over the period from 1970 to 2013. We find a strong decline in the world VAX-D ratio since the mid-1980s mostly accounted for by the substitution of foreign for domestic intermediates. Using a breakpoint detection method, we identify three waves of vertical specialisation in the world economy: 1970-79, 1986-95 and 1996-08. We find that most countries (79) initiated a period of vertical specialisation at least once. We find strong evidence that the VAX-D ratio correlates negatively with GDP per capita, and that the negative slope is flattening out at higher levels of income.

World VAX-D ratio

Work in progress

"Indirect exports of SMEs: evidence from Vietnam" (with Tevin Tafese).

We discuss indirect exporting of SMEs making use of firm-level data on SMEs in combination with highly detailed input-output tables. We investigate the effect of Vietnam's accession to the WTO through this channel.

"Value-Added Gains from Trade Facilitation: Evidence from Developing Countries in Africa and Asia". GGDC Research Memorandum 185

This paper evaluates the effects of foreign trade facilitation on gross exports and value added. Based on a gravity model of trade, we firstly estimate sectoral gross-trade elasticities to the time it takes to import and export. We secondly translate those elasticities into sectoral value-added gains using an input-output framework, accounting for the global fragmentation of production. We distinguish between sectoral value-added effects derived from exports by the sector itself, from indirect exports via other sectors of the same country and from linkages into other countries’ stimulated exports. Overall, we find relatively large potential benefits. Yet, lacking forward linkages into other countries’ stimulated exports and the initial export specialisation are drivers of cross-country differences. The sectoral structure of the value-added benefits depends additionally on exporters’ backward linkages, which we find to be highly heterogeneous across countries.

Book chapters

"Structural Change in Exports: From Product to Functional Specialization in Trade" (with Marcel P. Timmer). In Foster-McGregor, N., Alcorta, L., Szirmai, A., & Verspagen, B. (2021). New Perspectives on Structural Change: Causes and Consequences of Structural Change in the Global Economy. Oxford: Oxford University Press.

"Cities and Rural Transformation: A Spatial Analysis of Rural Youth Livelihoods in Ghana" (with Xinshen Diao, Peixun Fang, Eduardo Magalhaes, Jed Silver). In V. Mueller, & J. Thurlow (2020), Youth and Jobs in Rural Africa: Beyond Stylized Facts. Oxford: Oxford University Press.

PhD Thesis

"Global Value Chains and Economic Development". University of Groningen, SOM Research School (2020).

About 80 percent of global trade is nowadays between firms. Those firms engage in so-called global value chains (GVCs), jointly finalising goods while being located in multiple countries. This thesis studies the implications of this new form of production for economic development. Economic development typically requires the generation of jobs in manufacturing, and long-run productivity and value-added growth. Studying a large set of developing countries since the 1970s, this thesis provides evidence that participation in GVCs is positively correlated to GDP per capita and to productivity growth in formal manufacturing. These associations might be driven by efficiency gains of specialisation, the diffusion of technology within GVCs, and learning through relationships between participating firms. Yet, there is no evidence that GVC participation fosters faster employment growth in formal manufacturing on average. Results further show that there are large differences in job growth across countries due to their performance in GVCs, that is, their ability to capture rising income shares within GVCs. GVCs appear not to be a driver of jobs and structural change per se, but a small number of top performers engaging in GVCs appears to benefit greatly. It remains an important challenge to retrieve key policy lessons that allow countries to fully benefit from GVCs. Trade facilitation is often seen as one such policy, fostering exports of developing countries. Yet, this thesis shows that gains from such trade policies are not uniform, but depend on countries’ specialisation patterns and importantly on their forward and backward linkages within GVCs.

Page updated

Google Sites

Report abuse