In order to adequately measure a firm’sparticipation in GVCs in this context, it is important tofirst identify the different forms through which GVCintegration can affect domestic firms’ productivity.Integrating a country’s domestic suppliers into GVCsincreases the possibility for productivity gains throughexporting to a buyer abroad or supplying to a multinationalin the country. But countries should not neglect theopportunities for productivity gains that GVC participationcan provide from a buyer’s perspective. Instead of buildinga complete array of supply chains at home, firms can joinexisting supply chains of multinationals throughcross-border trade in intermediates and components (Taglioniand Winkler 2015). While Farole and Winkler (2014) focus onthe productivity spillovers from multinationals in acountry, this note looks at the impact of cross-border salesto international buyers (exporting) or purchases of inputsfrom international sellers (importing) in GVCs. This note isstructured as follows. Section two reviews the relevantliterature with regard to productivity effects from GVCparticipation as well as the role of domestic firmcharacteristics in this context. Section three introducesthe data and econometric model. In section four the authorpresents our regression results, while section five concludes.
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