Conference Paper
From Connectivity to Competitiveness: How Digitalization Shapes Firm Integration into Global Value Chains in the MENA Region
No.
ERF32AC_158
Publisher
ERF
Date
May, 2026
Topic
O3. Technological Change, Research and Development, Intellectual Property Rights
F2. International Factor Movements and International Business
F1. Trade
This article analyzes the role of digitalization in the integration of companies from six countries in the MENA region into global value chains (GVCs). Three dimensions are examined: the probability of initial participation, progression in the segment hierarchy, and the combined effect of digitalization and innovation. The analysis is based on the World Bank Enterprise Surveys and uses a binary logit, an ordered logit, and a sequential logit to identify the differentiated effects at each stage of integration. The results show that digitalization is a major determinant of access to GVCs, although its components do not have the same weight. Only websites and electronic payments have a significant effect, while simple connectivity has no measurable impact. In the ordered and sequential models, the composite digitization index remains highly significant, confirming its key role in coordination, traceability, and the management of organizational complexity. However, the interaction between digitization and innovation reveals a negative effect: in these six MENA countries, characterized by basic digital uses and mainly incremental innovation, the two dimensions do not generate complementarity but create substitution mechanisms that limit upgrading. The results highlight the need for integrated policies combining digitalization, organizational capabilities, and support for innovation to promote sustainable participation in GVCs.
Authors
Marouane Ikira
Associate Professor, Faculty of Legal, Economic and...
Authors
Youssef Bouazizi
Senior Lecturer, Ecole Nationale de Commerce et...
Authors
Meriem Oudmane
Associate Professor, Ecole Nationale de Commerce et...