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When Linder Meets Hirschman: Inter-Industry Linkages and Global Value Chains in Business Services.

37 Pages Posted: 8 Mar 2016  

Javier Lopez Gonzalez

OECD Trade and Agriculture Directorate

Valentina Meliciani

University of Teramo

Maria Savona

University of Sussex

Date Written: July 20, 2015

Abstract

The scholarship on Global Value Chains (GVCs) is recently focusing on the international fragmentation of production that involves services and in particular business services. It has been argued that participation in business services GVCs might open up new opportunities for structural change and catching up in developing countries. What are the theoretical and empirical bases for such a claim? This paper puts forward the conjecture that factor endowments and costs are not the only driver for the emergence of service GVCs and that the specific domestic structure of backward linkages à la Hirschman is of great importance. We empirically test this conjecture on the basis of the World Input Output Data in a GMM framework. We then attempt brief implications in terms of industrial policy for developing countries, particularly on the importance of developing domestic specialisation in business services before joining GVCs as a catching-up strategy.

Keywords: Business services, Global Value Chains, Hirschman linkages, development

JEL Classification: F63, L16, L80, O14

Suggested Citation

Lopez Gonzalez, Javier and Meliciani, Valentina and Savona, Maria, When Linder Meets Hirschman: Inter-Industry Linkages and Global Value Chains in Business Services. (July 20, 2015). SWPS 2015-20. Available at SSRN: https://ssrn.com/abstract=2744553 or http://dx.doi.org/10.2139/ssrn.2744553

Javier Lopez Gonzalez (Contact Author)

OECD Trade and Agriculture Directorate ( email )

Development Division
2, rue André Pascal, 75775 Paris Cedex 16
Paris
France

Valentina Meliciani

University of Teramo ( email )

Campus Coste S. Agostino
Via R. Balzarini 1, Località Colleparco
Teramo, TE 64100
Italy

Maria Savona

University of Sussex ( email )

Sussex House
Falmer
Brighton, Sussex BNI 9RH
United Kingdom

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