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This paper applies insights from different streams of value chain research to undertake a systematic analysis of various contemporary questions related to global value chains and their development implications. We exploit a detailed firm-level dataset that records the activities of 515 East African processing firms in three different value chains at the task level. By following a value chain mapping methodology, we first calculate the percentage of a chain’s total value-added that firms capture. After that, we separate and compare firms engaged to South–South and South–North value chains. We find that firms engaged with South–South chains tend to capture higher value-added shares while facing less entry barriers than firms predominantly engaged with South–North chains. This suggests that South–South value chains can provide a stepping-stone for firms to successfully participate in international markets.

This paper adopts a cross-country, multisector approach to investigate the intra- and inter-industry effects of foreign direct investment (FDI) on the productivity of 15 emerging market economies in 2000 and 2008. Our main finding is that intra-industry FDI has a large positive effect on total and “exported” labor productivity. The effects of FDI on total factor productivity are much more elusive, both in statistical and economic terms. This result suggests that foreign firms raise the performance of their host economies through a direct compositional effect. Foreign firms tend to be larger and more input intensive and have greater access to foreign markets than domestic firms. Their greater prevalence mechanically increases average labor productivity and export performance.

This study examines the effectiveness of an after-school tutoring programme that was implemented throughout Bangladesh. The exam results for three distinct classes (Bengali, English and Mathematics) were collected at three consecutive periods in the year 2015. The total sample of 1353 students can be separated into a treatment, i.e., the 900 students who were enrolled in the programme, and a control group, i.e. the 453 control students who were not enrolled in the programme. Using a difference-in-difference setup, the results show that the treatment group improved their grades over time significantly more than the control group. This difference is significant for all three classes and ranges from 2.3 percentage points in English to 3.4 percentage points in Mathematics. As a robustness check, student-fixed effects, which control for any time-invariant differences between individual students, were included and the results remain unchanged. Altogether, these results indicate that the after-school tutoring programme had a significantly positive effect on students’ school performance.

Trade and investment support institutions can help their domestic firms internationalize. In doing so, economic missions accompanied by a member of government are the strongest instrument at their disposal. We combine detailed information on the activities of the full population of Dutch firms over the period 2008–2017 to estimate the effect of firm participation in economic missions on the extensive margin of trade in both goods and services as well as FDI. Using a range of empirical methods, we first show that mission participation increases the chance of market entry via goods exports or imports as well as FDI by 5.4, 5.8 and 2.3% points, respectively, while trade in services is not affected. These results are robust to various pre-selections that control for differences in internationalization appetite. We then open the “black box” of trade and investment promotion by showing that firm size, additional missions, a thematic focus and the destinations’ business climate are important success factors. Further strengthened by the results of a qualitative survey, we interpret these findings as evidence that missions play a crucial role in reducing information asymmetries as well as in firms’ stepwise internationalization process.

We construct an empirically supported definition of incidental and perennial exporting and investigate to what extent incidental exporting is a steady-state of firms, to what extent incidental exporters are distinguishable from non-exporters and perennial exporters and which factors explain the switching of export status. Our findings point at a Melitz (Econometrica 71(6): 1695–1725, 2003) type productivity sorting pattern, where perennial exporters are more productive than incidental exporters which are in turn more productive than non-exporters. However, incidental exporting seems to be a temporary state for the large majority of firms on their way to either becoming a perennial exporter or exiting foreign markets altogether. For only a relatively small group of firms, the intermittent exporters, incidental exporting—typically shipping one product to one country every few years—seems to be business as usual. Labor productivity shows to be a key factor in the process of moving from incidental exporting to perennial exporting. Particularly expanding the export portfolio along the extensive margin adds to the robustness of the firm’s export status, even though growth along the intensive margin also cements a firm’s position on foreign markets.

The past four decades have seen a large increase in trade via Global Value Chains (GVCs) as well as the relative demand for skilled labour. This thesis centres around the question how the former influences the latter. It firstly describes the large theoretical and empirical ambiguity that exists in the literature before proposing a novel graphical exposition of the channels by which GVCs affect the relative demand for skilled labour. This graph can synthesize the literature and show how small changes in microeconomic foundations can crucially alter predicted outcomes, greatly reducing theoretical ambiguity. It can also serve as a conceptual framework for empirical analysis which should remain the key method to analyse the research question. Therefore, Chapters 2 and 3 employ micro and macro level data, respectively, and condition their results on the conclusions drawn from this conceptual framework. In line with that framework, this thesis finds that the relative skill abundance of the countries engaged in the GVC, which is used as a proxy for the factor bias of the GVC activity, crucially determines the results. On the other hand, the skill intensity of the sector that engages in GVCs does not seem to affect the results. This can best be interpreted in that GVCs allow (firms within) countries to specialise in their comparative advantage at an even more granular level than before, i.e. in the production of intermediate goods or tasks, rather than final goods. Finally, Chapter 4, rather than looking at the effects of GVCs, looks at some of the causes. While formal tariffs have been going down, allowing the expansion of GVCs, non-tariff measures (NTMs) have increased. Chapter 4, however, finds that these NTMs do not significantly affect the export values of goods within that same value chain.