No abstract

The emergence of food and agriculture global value chains (GVCs) is challenging the way scholars look at trade data, as well as how policy makers establish their trade policies. The common perception is that Sub‐Saharan African (SSA) countries, unlike most Latin American and Asian countries, are not deeply integrated into global production networks. Consequently, it is believed that the border protection policies of the former may have a limited impact on GVC participation. This paper challenges this conventional knowledge in two ways. First, by decomposing bilateral gross export into its value added components, we show that the sectoral and bilateral SSA participation in GVC for food and agriculture is substantial. Second, we demonstrate that trade policies impact backward and forward value chain linkages. These results call for a refinement of trade policy priorities in SSA.

This work explores the relationship between exports, global value chains (GVCs)’ participation and position, and firms’ productivity. To this aim, we combine the most recent World Bank Enterprise Survey in Latin American and Caribbean (LAC) countries with the Organisation for Economic Co-operation and Development and World Trade Organization trade in value-added data. To explore the above relationship, we adopt an extended version of the standard Cobb-Douglas output function including indicators of export performance and GVCs. We control for heterogeneity among firms (by country, region, and industry), sample selection, firms’ characteristics, and reverse causality.\ud Our empirical outcomes confirm the presence of a positive relationship between participation in international activities and firm performance. They also show that both participation in GVCs and position within GVCs matter. These findings have strong policy implications and may help policymakers in choosing the best policy options to enhance the link between GVCs’ integration and firms’ productivity