Firm Volatility in an Era of Global Value Chain: The Role of Product Quality
| dc.contributor.author | Gideon Ndubuisi | |
| dc.contributor.author | Solomon Owusu | |
| dc.date.accessioned | 2025-01-17T09:55:57Z | |
| dc.date.available | 2025-01-17T09:55:57Z | |
| dc.date.issued | 2025 | |
| dc.description.abstract | It is widely recognized that trade and volatility are intricately linked, which has led to a large literature that examines the nature of such relationship. Despite more than 50% of global trade now taking place through the global value chain (GVC), this literature has proceeded without considering the role of GVC. This paper fills this gap by examining the effect of GVC participation on firm job growth volatility and the role of product quality in shaping this relationship. We combine custom transaction-level data and data on firm characteristics that are both provided by the South African Revenue Services and National Treasury (SARS-NT) on the universe of formal manufacturing firms in South Africa for the period 2010-2017. We find robust evidence suggesting that embeddedness in GVC reduces firm volatility, especially for firms that produce and export higher-quality products in the value chain. Therefore, our results provide evidence that GVC offers firms the opportunity to build resilience in terms of reducing volatility, which is paramount to building production capacity, stable export earnings, and higher value capture in the value chain. | |
| dc.identifier.uri | https://publication.aercafricalibrary.org/handle/123456789/3922 | |
| dc.language.iso | en_US | |
| dc.publisher | AERC | |
| dc.relation.ispartofseries | GVC-II-007 | |
| dc.title | Firm Volatility in an Era of Global Value Chain: The Role of Product Quality | |
| dc.title.alternative | GVC-II-007 | |
| dc.type | Working Paper |