The Peculiarities of Integration of Developing Countries into Global Value Chains

Abstract

Participation in global value chains (GVCs) has traditionally been one of the most important external factors of socio-economic development of developing countries. However, the successful and deep integration of national economies into GVCs can`t be considered a universal phenomenon, and at present many developing countries remain unattractive in terms of locating the business operations carried out within international companies` global production networks. The aim of this article is to identify the major peculiarities of developing countries` integration into GVCs. In addition, the paper provides several examples of how certain factors contributed to the entry of individual states, namely Vietnam, Costa Rica and Morocco, into specific GVCs. Special attention in the research is paid to the role of developing countries` public policy in creating the favorable business environment for joining GVCs. The analysis indicates that developing countries can strengthen their potential for integration into GVCs by optimally utilizing the existing comparative advantages along with applying the public policy measures aimed at improving the quality of business environment.