Conference Paper
GVCs and Entrepreneurial Activity: The Role of Institutions and Labor Provisions
No.
ERF32AC_44
Publisher
ERF
Date
May, 2026
Topic
F. International Economics
This paper examines the nexus between participation in global value chains (GVCs) and entrepreneurial activity, with particular attention to the moderating role of institutional quality and labor provisions enforced in trade agreements. Using panel data that combine the EORA multiregional input–output tables with World Bank entrepreneurship indicators, the analysis distinguishes between forward and backward GVC participation measures to capture the different channels through which international production linkages influence entrepreneurial dynamics. Preliminary results show that although both forward and backward GVC integration increase entrepreneurial density, backward linkage, measured by foreign value added exported, is more relevant than forward linkages. Furthermore, institutional quality exerts a direct, robust effect on entrepreneurship density and negatively moderates the GVC-driven entrepreneurial activity, signaling a substitution effect. On the other hand, labor provisions exert a direct negative effect on entrepreneurial activity and do not moderate the GVC-driven entrepreneurial dynamics. The findings reveal heterogeneous effects across different income and regional groups.
Research Associates
Yasmine Eissa
Assistant Professor and Associate Chair, Economics Department,...