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<p>Backward linkages in global value chains (GVCs) could potentially enable developing economies to boost exports through lower costs or higher productivity by leveraging foreign value added in their exports (FVAX). However, the benefits may vary across industries and development levels. This paper examines how FVAX influences manufacturing exports, focusing on heterogeneity by R&amp;D intensity (high-tech vs. low-tech) and country development (developed vs. developing). Possible endogeneity is addressed by employing an instrumental variable approach. The paper finds a suggestive evidence of positive FVAX effect on exports. In particular, low-tech industries in developing countries, and high-tech industries in developed countries benefit from these gains. These findings highlight the potential of low-tech sectors in developing economies to support export-led growth, offering insights for trade policy and industrial strategies.</p>

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Imported inputs, export success: do backward GVC linkages boost manufacturing exports?

  • 期刊论文

  • 发表日期：

    2026年1月7日

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  • M. Rahul,
  • Deepika Srivastava

摘要

Backward linkages in global value chains (GVCs) could potentially enable developing economies to boost exports through lower costs or higher productivity by leveraging foreign value added in their exports (FVAX). However, the benefits may vary across industries and development levels. This paper examines how FVAX influences manufacturing exports, focusing on heterogeneity by R&D intensity (high-tech vs. low-tech) and country development (developed vs. developing). Possible endogeneity is addressed by employing an instrumental variable approach. The paper finds a suggestive evidence of positive FVAX effect on exports. In particular, low-tech industries in developing countries, and high-tech industries in developed countries benefit from these gains. These findings highlight the potential of low-tech sectors in developing economies to support export-led growth, offering insights for trade policy and industrial strategies.