Global Value Chains and Industrialization in Africa
Date
2023
Authors
Nguekeng, Bernard
Mignamissi, Dieudonné
Journal Title
Journal ISSN
Volume Title
Publisher
African Economic Research Consortium
Abstract
The objective of this study is to analyse the main effects of the integration of African
countries in the global value chains (GVCs) on their industrialization level. To this
effect, we have specified an industrialization equation that takes into account the
economic characteristics of the continent. We have then estimated that equation by
the system GMM estimator method on a sample of 51 African countries with panel data
spanning the period 1996‒2018 sourced from international organization databases.
The findings of the estimations are the following: (1) the participation and the position
of African countries in GVC positively contribute to their industrialization. The imports
of intermediate goods facilitate the access to foreign machinery and technologies,
which stimulate local production. Furthermore, the position in value chains that
are limited to assembling activities would also allow for achievement of significant
industrial progress; (2) the main factors influencing the indirect transmission of GVC
to industrialization are the human capital and the physical capital; (3) the results are
stable as shown by several robustness check tests related to different modalities of
integration in GVC, to the conception of a new participation indicator in GVC, and to
sub-regional specificities. On the basis of these results, we recommend policy actions
to enhance participation, but also to improve the position in GVC, while at the same
time an appropriate strategy would be designed to accumulate human capital and
physical capital in the long term.
Description
Keywords
Industrialization; GVC; Africa; Dynamic panel; System GMM.