Global value chains and export growth in South Africa: evidence from dynamic ARDL simulations

Abstract

Over the past few decades, the international trading system has become strongly organised around global value chains. Theoretical and empirical research show that there are numerous benefits associated with participation in global value chains. However, empirical findings on the importance of backward and forward linkages into global value chains are still limited. This paper makes a contribution to the global value chains literature by exploring the relationship between different measures of global value chains participation and export growth in South Africa. Empirical evidence on the relationship is obtained through the use of dynamic autoregressive-distributed lag simulations on data covering the period 1990-2019. Findings indicate the following; the backward linkages (foreign value added) and domestic value added in exports both have significant long-run increasing effects on export growth in South Africa. Indirect value added (forward linkages) has significant short-run and long-run increasing impact on export growth in the country.

Keywords:

• South Africa
• global value chains
• export growth
• dynamic ARDL simulation
• International trade

JEL Codes:

• C32
• F14
• F15
• F23

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Notes on contributors

Godwin Olasehinde-Williams

Godwin Olasehinde-Williams Earned a B.Sc. degree in Economics from Ajayi Crowther University in Nigeria where he graduated as the valedictorian. He also has both Masters and Doctorate degrees in Economics from Eastern Mediterranean University, Turkey. He has published several research articles in reputable international academic journals. His areas of interest include Macroeconomics, Applied Econometrics, Energy and Environmental Economics.

Ayodele Folorunso Oshodi

Ayodele Folorunso OSHODI is a lecturer at the Department of Economics, University of Ilorin, Nigeria. He holds a Ph.D. degree in Economics from the University of Ilorin with 19 years of teaching and research experience and has several publications to his credit. His areas of specialisation and interest include: International Economics, Industrial Economics and Development Economics.