Trade Specialisation and Performance in Global Value Chains

39 Pages Posted: 1 Jun 2019

See all articles by Filippo Bontadini

Filippo Bontadini

University of Sussex - Science Policy Research Unit (SPRU)

Date Written: June 2019

Abstract

This paper investigates whether trade specialisation explains economies’ trade performance within a Global Value Chain (GVC) context. We consider trade specialisation in natural resources, high and low tech manufacturing and business services, before and after the financial crisis. The aimed contribution of this paper is to shed light on the effects of trade specialisation as measured in domestic value added embodied in exports rather than gross exports. We add to the literature on GVCs by: (i) studying the role of the domestic productive structure in countries’ trade specialisation and performance, (ii) accounting for the rate of changes in trade specialisation as affecting GVC performance. We employ Balassa indexes based on value added flows in a GMM dynamic panel framework.

We find that trade specialisation in low-tech manufacturing and natural resources have a negative impact on value added exported by countries. High-tech manufacturing and knowledge intensive services exhibit a positive effect during the crisis period. We discuss these findings in relation to the recent debates on the role of manufacturing and premature de-industrialisation in developing countries.

Keywords: Global Value Chains, Trade Specialisation, KIBS, Input-Output

JEL Classification: F14, F63

Suggested Citation

Bontadini, Filippo, Trade Specialisation and Performance in Global Value Chains (June 2019). SWPS 2019-10. Available at SSRN: https://ssrn.com/abstract=3414324 or http://dx.doi.org/10.2139/ssrn.3414324

Filippo Bontadini (Contact Author)

University of Sussex - Science Policy Research Unit (SPRU) ( email )

Brighton, BN1 9SL
United Kingdom

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