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Faculty of Economics

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Formai, S. and Caffarelli, F.

Quantifying the productivity e ects of global value chains

CWPE1564

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: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1564.pdf

Open Access Link: https://doi.org/10.17863/CAM.5779