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Global Value Chains: The Productivity Contribution of Intangible Assets and Participation in Global Value Chains (308018)*Ahmed Bounfour, Université Paris-Sud, Université Paris-Saclay
Keung Oui Kim , Université Paris-Sud, Université Paris-Saclay
Alberto Nonnis, Université Paris-Sud, Université Paris-Saclay
Altay Ozaygen , Université Paris-Sud, Université Paris-Saclay
Keywords: Global value chains, productivity, intangibles
This paper studies the contribution to productivity of five types of intangibles (R&D, computer software, brand, design and organizational capital) and global value chain (GVC) participation. The analysis is conducted at industry level. GVC participation is analyzed using network centrality measures calculated from World Input-Output Database (WIOD), while intangible valuation is obtained from the Intan-Invest database. Our unbalanced panel consists of 17 countries and 16 sectors observed for the period 2000-2014. The analysis is based on a two-stage procedure. First, a proxy for total factor productivity (TFP) is recovered by estimating a production function with labor and capital as inputs, accounting for endogeneity by means of production function estimation specific methods. Secondly, the retrieved TFP is used to evaluate how several types of intangibles and GVC measures affect productivity. Moreover, a mediation analysis is performed to estimate jointly the impact of the two factors and evaluate the role of GVC in the transmission mechanism between intangibles and productivity. Both GVC and intangibles were found to provide a significant and considerable contribution to driving productivity. Moreover, results revealed that intangibles have an impact via two channels: one direct and one indirect via the mediation of GVC. Results show not only the contribution of intangibles and GVC integration to productivity, but also the combined effect of the two, which is the main novelty of this study. Intangibles are found to have a second round effect mediated by GVC, which is as large as the direct effect in terms of magnitude.