Global value chains in the age of internet: what opportunities for Africa?

Tunisia - 20 January 2021

Trade topics: Digital Trade, Global Value Chains, Trade Facilitation

This chapter analyses the impact of the internet on global value chains (GVCs) in Africa. We investigate the effect of internet adoption on forward participation and backward participation of African countries in GVCs. We conduct the estimations using country-level data from the United Nations Conference on Trade and Development (UNCTAD) Eora GVC database and firm-level data from the World Bank’s Enterprise Survey. We test whether internet adoption facilitates the participation of Africa in GVCs at the country level and the firm level. We find that internet use and internet infrastructure are more important for African firms and African countries in terms of forward GVC participation. To conclude, empirical results show that the internet increases GVC participation in Africa. African countries and firms need to improve internet infrastructure in order to make the best of integration into GVCs.

Author(s): Leila Baghdadi, Insaf Guedidi