Global Value Chain Participation and Current Account Balances in Landlocked African Countries
Kenfack Geraud Francis *
The Dschang School of Economics and Management, The University of Dschang, Cameroon.
Ningaye Paul
The Dschang School of Economics and Management, The University of Dschang, Cameroon.
Kuipou Toukam Christophe
The University of Bamenda, Cameroon.
*Author to whom correspondence should be addressed.
Abstract
The objective of this paper is to find out the direction of Global Value Chain Participation (GVCP) that contribute more to the Current Account Balance (CAB) in landlocked African countries from 2000 to 2018. Our specification follows the IMF's External Balance Assessment (EBA) model. The Feasible Generalized Least Square (FGLS) econometric technique is applied on data from three sources: (1) UNCTAD-EORA database for forward and backward participation indicators, (2) World Development Indicator (WDI) data set, for current account balance, foreign direct investment (FDI), population and trade openness and (3) Penn World Tables (PWT) for exchange rates. Results highlight a positive and significant contribution of forward GVCP on CAB in landlocked African countries. The study recommends that landlocked African countries should be active providers of value-added intermediary inputs to other Global Value Chain actors.
Keywords: Global Value Chain Participation (GVCP), current account balance, landlocked countries, Feasible Generalized Least Square (FGLS).