Foreign Direct Investment and Developing Countries Participation in Global Value Chains (GVC)

Could foreign direct investment (FDI) contribute to improving developing countries' participation in global value chains (GVC)? This is the main issue addressed in this paper. Indeed, FDI seems to be, at least theoretically, a mean to speed up developing countries' participation in GVCs in a number of ways. This paper brings the empirical proof of this intuition using an error correction panel model on 44 developing countries between 1990 and 2018. Our results show that the value of the investment is a more significant indicator than the share of FDI in GDP in developing countries. The more FDI developing countries earn the better is their participation in GVC