Building knowledge from engaging in backward and forward Global Value Chains

Authors: Claudia De Fuentes*, Sobey School of Business, Saint Mary's University, Jahan Ara Peerally, HEC Montreal, Jason Rhinelander, Saint Mary's University
Topics: Economic Geography
Keywords: Backward and forward global value chains, knowledge, globalization
Session Type: Paper
Day: 4/3/2019
Start / End Time: 8:00 AM / 9:40 AM
Room: Diplomat Room, Omni, West
Presentation File: No File Uploaded

The global economy is increasing in its magnitude and also in the forms that organizations and individuals are using to engage in global networks. Engaging in global networks has several implications including both positive and negative. On the one hand, engaging in global trade has important implications for the process of knowledge accumulation and innovation and it is also an indicator of the economic complexity of countries. On the other hand, engaging in global networks can bring negative implications for the host country such as de-industrialization processes. Our study contributes to an initial discussion on the evolution of backward and forward global value chains (GVCs) and the differences across OECD and non-OECD countries. The main aim of this paper is to understand the effect of engaging in GVC and its effects in the process of building technical knowledge within countries. We do so by using the trade in value added (TiVA) indicators produced jointly by the OECD and the WTO, in particular those associated to backward and forward participation in GVC. These sets of indicators are calculated for 64 countries and 34 industries for the years 1995 to 2011. Our results suggest that increased and rapid globalization processes have contributed to a more dynamic economy, and both, OECD and non-OECD countries have, in general increase the rate of their participation in GVCs. Our study has important implication for the effect of engagement in GVCs in particular as a source or relevant technical knowledge that is necessary for development.

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