Trade in global value chains as a driver for economic growth in ECOWAS: The complementary role of regional trade agreement Review of World Economics

Abstract

Abstract The research analyzes the effects of global value chains (GVCs) on economic growth in the Economic Community of West African States (ECOWAS) during 1990–2020 by highlighting the complementarity role of the regional trade agreement (RTA). Unlike previous studies at the ECOWAS level, this research focuses on the specific aspect of trade in GVCs. This research also investigates the complementary role of RTA and uses a continuous index of RTA rather than dummy variables which are often employed. To control for the endogeneity issue, the research applies the instrumental variables approach. The findings indicate the positive effect of GVCs on growth but the effect of forward GVC participation is greater than that of backward GVCs. They also show the differentiated effects of agricultural, manufacturing, and services GVCs. Finally, the findings reveal that the effect of GVCs on growth increases with RTA. These findings have important policy implications. JEL Classification: E61, F1, O47