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The Cambridge-INET Institute - continuing as the Janeway Institute

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Formai, S. and Caffarelli, F.

Quantifying the productivity effects of global value chains

WP Number: 1521

Abstract: This work analyses the relationship between international fragmentation of production and productivity growth. To identify the impact of fragmentation on productivity growth,we employ the methodology proposed in a different context by Rajan and Zingales (1996). In particular we interact the length and the width of sectoral production chains with a measure of countries' involvement in international fragmentation of production. We find evidence indicating that off-shoring increases labour productivity and total factor productivity in the externalising country.

PDF: wp1521.pdf

Open Access Link: 10.17863/CAM.5779