International linkages, value-added trade, and firm productivity in Latin America and the Caribbean

Montalbano, Pierluigi, Nenci, Silvia and Pietrobelli, Carlo (2016) International linkages, value-added trade, and firm productivity in Latin America and the Caribbean. In: Grazzi, Matteo, Pietrobelli, Carlo and American, Development Bank (eds.) Firm innovation and productivity in Latin America and the Caribbean: the engine of economic development. Palgrave Macmillan, New York, pp. 285-316. ISBN 9781349581511

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This chapter addresses the following research questions: (i) Are firms characterized by international linkages more productive than other firms? (ii) Are those belonging to industries more involved in GVCs even more productive? To this end, we combine the World Bank Enterprise Survey dataset with the new OECD-WTO TiVA dataset and present three main empirical exercises: (1) an analysis of productivity premia associated with participation in international trade and presence of inward FDI; (2) a Cobb–Douglas output function expanded to firms’ international linkages; (3) a further expanded version of the above relationship including the TiVA-based indicators of value added trade and industry participation and position in the global value chain. Our empirical outcomes confirm the presence of a positive causal relationship between participation in international activities and firm performance in the LAC region. Focusing on four big Latin American countries we show that the actual level of involvement into GVCs matters as well.

Item Type: Book Section
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: H Social Sciences > HF Commerce
Depositing User: Prof. Pierluigi Montalbano
Date Deposited: 15 Mar 2017 09:03
Last Modified: 15 Mar 2017 09:03

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