Determinants of Participation in Manufacturing GVCs in Africa : The Role of Skills, Human Capital Endowment and Migration
This analysis assesses the role of skills, human capital endowment, and migration as determinants of Sub-Saharan Africa's participation in manufacturing global value chains. Due to lack of reliable data on skilled labor, skilled and unskilled...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/884311562848071755/Determinants-of-Participation-in-Manufacturing-GVCs-in-Africa-The-Role-of-Skills-Human-Capital-Endowment-and-Migration http://hdl.handle.net/10986/32058 |
| Summary: | This analysis assesses the role of
skills, human capital endowment, and migration as
determinants of Sub-Saharan Africa's participation in
manufacturing global value chains. Due to lack of reliable
data on skilled labor, skilled and unskilled labor contents
in exports were generated from the Global Trade Analysis
Project database. A panel of 23 countries for which data on
skills and manufacturing global value chains are available
for 19 subsectors was constructed. A fixed-effect gravity
model was used to estimate the determinants of backward and
forward global value chain participation. The estimates
obtained from the sample are compared with global data
covering 115 countries for benchmarking purposes. The
results indicate that for economies in Sub-Saharan Africa,
skilled labor seems to be the strongest determinant of
participation in backward and forward global value chains.
Similarly, initial human capital endowment has a strong
positive impact on global value chain participation at the
global level. However, countries with relatively high
initial capital endowment benefit more by incorporating
foreign value-added products in their manufacturing exports.
Finally, countries that receive net inflows of migrants tend
to engage better in backward and forward global value chains
than those with net outflows of migrants. The findings
suggest that policies to improve Sub-Saharan Africa’s
integration in manufacturing global value chains should
target: shifting from unskilled to skilled labor-intensive
backward and forward global value chain activities;
upgrading the quality of the labor force, since unskilled
workers are so far the most available and the most used in
manufacturing global value chains; investing in the quality
of human capital; and promoting intraregional skills mobility. |
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