Global Value Chain II

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Job Impacts of Global Value Chains: Firm-Level Evidence from Cameroon
(AERC, 2024-11-27) Njikam, Ousmanou
Today, almost 50% of the world trade involves Global Value Chains (GVCs). New technologies entering GVCs participating firms’ exports are skill-biased and understanding the job implications in African countries endowed with unskilled workers is vital. Using firm-level panel data in Cameroon, this paper analyses whether GVCs’ integration and position have contributed to job generation and explores whether firm characteristics such as capital and skill intensity of production influence the GVCs-job relationship. I estimate dynamic labour demand functions for skilled and unskilled workers including sector-level GVCs and their interactions with firm characteristics. GVCs integration and position have no significant impact on any type of job. However, examination of moderator effects yields important results: while forward GVCs and GVCs position hurt both (un)skilled workers in less capital- and skill-intensive firms, backward GVCs have a significantly positive impact on (un)skilled jobs in more capital- and skill-intensive firms, and GVCs participation enhances only unskilled jobs in more capital-intensive firms. The findings are robust to the disaggregation of sectors into manufacturing vs services, high- vs low-GVCs participation, and upstream vs downstream industries and highlight the role of human capital in influencing the GVCs-job nexus in African economies.