Processing Trade Under Global Value Chains in Africa: Lessons From Asia

9 Pages Posted: 15 Jan 2021

See all articles by Alice Binene Tshibanda

Alice Binene Tshibanda

Zhejiang University of Science and Technology

Zhiming Deng

University of Queensland

Date Written: November 23, 2020

Abstract

A global value chain refers to the globalized production process in which the tasks in producing a final product become unbundled and are conducted in different countries. Due to high transportation and coordination costs, globalized production has been very rare in Africa. Most goods were made within a country, or just within a workshop. Processing trade under global value chains has been on a high level policy agenda by African countries. Despite trade under global value chains, there has been an intense debate questioning why some African countries are advancing in the global marketplace, while others are failing to do so. Some authors have noted that Asia has been playing a role, trading very well under global value chains. The purpose of this paper is to gain an understanding of the meaning attached to global value chain by African countries and also to establish why trade has been successful under global value chains in Africa and explore why some African countries are failing to process trade under global value chains despite lessons from Asian countries. Data used in this study was collected through 100 questionnaires and six semi- structured and open-ended interviews administered on managers from Exporting organizations in Africa. The systematic random sampling method was used to select respondents for quantitative research while the purposive method was used to select respondents for qualitative research. SPSS version 21.0 was adopted to analyze quantitative data while the reduction method was adopted for qualitative data. Findings reveal that there is no clear understanding and standard meaning for global value chains. Some African countries are now being ranked in Africa with respect to inward Foreign Direct Investment (FDI), according to the United Nations Conference for Trade and Development (UNCTAD)’s performance index of the World Investment Report (2018).

Keywords: trade, global value chain, exporting, production

Suggested Citation

Tshibanda, Alice Binene and Deng, Zhiming, Processing Trade Under Global Value Chains in Africa: Lessons From Asia (November 23, 2020). Available at SSRN: https://ssrn.com/abstract=3736033 or http://dx.doi.org/10.2139/ssrn.3736033

Alice Binene Tshibanda (Contact Author)

Zhejiang University of Science and Technology ( email )

China

Zhiming Deng

University of Queensland ( email )

St Lucia
Brisbane, Queensland 4072
Australia

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