Does global value chain participation enhance domestic value‐added in exports? Evidence from emerging market economies

Abstract

Abstract This study aims to examine whether the participation of 24 emerging market economies (EMEs) in global value chains (GVCs) enhance the economic upgrading in the form of improvements in domestic value‐added exports over the period 1995–2011. To do so, first, the study explores the forward and backward participation in GVCs which shows an increasing level of GVCs participation. Second, this study empirically investigates the impact of GVCs on the domestic value‐added exports using panel feasible generalised least squares technique. The results reveal that both forward and backward participation has significantly improved the economic upgrading in case of EMEs. Further, the results show similar findings across several subgroups based on incomes, regions and others. Policies to foster greater GVC participation can help EMEs to tap the potential benefits associated.

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