Global value chains, technological sophistication and economic complexity: panel data for 58 economies from 2006 to 2015

Abstract

Abstract In the 21st century, the intensification of global production networks has made it important to understand the implications for the productive structures of countries important. This study aims to investigate whether participation in global value chains (GVCs) can change the degree of technological sophistication of exports and a country’s economic complexity, considering a sample of 58 countries and a subsample consisting only of developing countries, from 2006 to 2015. We estimate dynamic models by difference and system GMM considering two dependent variables: an export sophistication index (‘q’) and the economic complexity index. We find a positive and significant relationship between participation in GVCs and degree of sophistication of the export basket, measured by the ‘q’ index. However, considering a broader measure of economic complexity (the ECI index), the effects were negative and not significant for developing countries.

Keywords

• Value added
• Structural change
• Globalization
• Exports
• Dynamic panel