Global Value Chain Participation and the Technology Structure of Exports : Experience from the Central and Eastern European and Western Balkan Countries

Producing technologically complex goods and incorporating them into the manufacturing process is a fundamental pillar to achieve long-term economic development. In this sense, integration into the global production and trade networks is viewed by many countries as a way to achieve this technological improvement. This paper examines the relationship between global value chain (GVC) integration and technology absorption through the trade in high-tech products in Central and Eastern European and Western Balkan countries over the period 1996-2019. We construct a GVC participation measure applying the latest Broad Economic Categories classification that distinguishes between generic and specific intermediate goods. We also analyse the technology structure of exports at a country and industrial level. Using panel data regression techniques, we find that a higher participation in GVCs enhances the export of high-tech products at both country and sectoral level. This result is robust to different regression models including the use instrumental variables