North African countries and firms in international production networks
Title: North African countries and firms in international production networks
Series/Number: EUI RSCAS; 2016/26; Global Governance Programme-216; [Global Economics]
This paper analyzes the participation of North African countries into international production networks and examines if/to what extent being part of a global value chain affects firms' performance. Using largely unexploited Input-Output data from UNCTAD-Eora, we describe regional and country GVC involvement. Results show that North African countries have not been able so far to fully integrate into international production networks. However, large part of their (low) trade is due to value added related activities, mainly in the upstream phases, and the importance of global linkages has been increasing over time. To better understand the impact of international fragmentation of production on competitiveness, we complement the above assessment with a firm-level analysis. We show that the performance of firms, measured by several indicators, is positively associated with both internationalization modes and GVC participation. These results confirm those of our sectoral analyses and are in line with existing anecdotical evidence. Enhancing GVC participation of North African countries is likely to substantially benefit firms, countries and the whole area. However, the ability to retain such benefits relies on specific characteristics, such as the level of human capital, trade logistics and the presence of trade barriers, thus leaving room for policy intervention.
Subject: Global value chains; Firm heterogeneity; North Africa; Competitiveness; F14; F15; L23; L25; 055
Type of Access: openAccess