The Quest for Participating to Global Value Chain in Sub-Sahara Africa: An Analysis of Determining Factors Using a Spatial Panel Model

Abstract

This paper aims to determine the factors that influence the participation of the Sub-Saharan Africa countries in the global value chain (GVC). The paper use of a spatial panel Model to show that the variability of participation in the global value chain is explained by the total factor productivity, the dollar rate, the terms of trade, the type of economic zone and the degree of integration of countries into the Global Economy (Globalization). Empirical evidence displays a positive link between the total factor productivity growth and the participation in the global value chain. The rise of the Dollar against the Euro strengthens the participation in the global value chain. The deterioration of the terms of trade decreases participation in the global value chain. Special Economic Zones have a positive effect on the global value chain. On the other hand, a significant negative relationship between the free trade zones and participation in the GVC is observed. Finally, with the exception of the Economic Globalization Index and Political Index, all the other indexes have a positive and significant impact on participation in the GVC. The Sub-Saharan African countries have an interest in becoming more integrated into the globalization of trade, information technology and finance. They must also promote economic and political integration.