EMNES Working Paper No 42

Global Value Chains (GVCs) have become the predominant structure in world trade flows. They allow the specialisation of firms in very specific tasks, thus offering easier access to international markets. Developing countries may benefit from this framework through many channels. We focus on Egypt, a country that has faced remarkable challenges in recent years. The analysis is based on the World Bank Enterprise Surveys. After descriptive statistics that evidence the superior performance of traders with respect to domestic firms, this paper investigates the specific relationship between GVC participation and firm productivity. We are interested in enquiring whether a learning mechanism for Egyptian GVC participants exists, in the aftermath of the revolution. We use the definition by Taglioni and Winkler (2016), that allows participants to be broken down into different groups and, hence, to investigate differential effects for these categories. By using a DiD-PSM procedure, we affirm that entering a GVC produces an increase in a firm’s productivity; moreover, the effect is heterogeneous amongst the different groups. In the empirical analysis, we compare the results with those obtained using the Multiple Imputation procedure, in order to partially solve the problem of missing data.

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