Trade networks and the productivity of MENA firms in global value chains

May 3, 2024
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Global Value Chain (GVC) participation is typically associated with a productivity premium, yet similar firms can benefit differently depending on the possibility for creating production linkages offered by their countries’ involvement in trade.

The authors show that country-sector intermediate trade network centrality is also positively associated with firms’ productivity, suggesting that the connectivity of the business environment may enhance productivity on top of direct firm-level involvement in GVCs. For a large cross-section of MENA countries included in the World Bank Enterprise Surveys (WBES), they find evidence of productivity premia using several firm-level GVC participation measures and network centrality indicators constructed from the EORA input-output tables.