Determinants of MENA countries participation in global value chains

الملخص EN

This study seeks to measure the effect of Macroeconomic factors which are GDP, FDI, Level of industrialization, Domestic Credit, Quality of infrastructure, Governance Indicators, along with property protection, and Innovations on the value of GVCs participation.

By employing OLS model with panel fixed effects covering 15 MENA countries, over the period 2007–2018 for each country.

Consistent with our predictions, the empirical results indicate a positive relationship with GDP and FDI, while negative relationship with the level of industrialization, and find no association with Domestic credit.

Concerning the impact of Infrastructure quality, we find a positive impact for use of mobile and Internet, and insignificant for quality port and quality roads.

Concerning the impact of Governance Indicators, we find a positive impact for regulation quality and a negative impact for political stability, and control corruption and insignificant for rule of law.

Our analysis also shows a positive impact for innovation and a negative impact for property protection.

This requires Attracting more foreign investment and directing it towards manufacturing industries, increasing the value added of manufacturing in the GDP, establish policies that encourage education, technical training, and development Human capital to the needs of the specific value chain segments, specialized skills are a needed for participation in high value added stages of the chain, encouraging innovation, increasing the efforts to reforms Trade and investment policy, as well as improvements of infrastructure, logistics, institutions quality, protecting intellectual property rights, and Improvement the role of banks to promoting investments.

This study adds value for how macroeconomic factors and corporate governance work as a motivator or constrained for GVCs participation in different markets.