“Participation in Global Value Chains and Its Role in Economic Growth: Selected Country Experiences with Potential Applications in Iraq”
A Thesis Submitted to the Council of the College of Administration and Economics / University of Karbala in Partial Fulfillment of the Requirements for the Master’s Degree in Economic Sciences
Prepared by
Ameer Jawad Jamal
Supervised by
Assistant Professor Dr. Huda Zueir Makhlif
Abstract
This study addresses the importance of participation in global value chains (GVCs) and their impact on economic growth. It aims to explore GVCs and the mechanisms of integration, understand the relationship between GVCs and economic growth, and identify the role GVCs play in fostering economic development in countries that have actively participated in these chains. By examining selected international experiences, the study seeks to extract lessons that could be applied to the Iraqi economy. Iraq faces significant challenges, including weaknesses in most economic, industrial, and service sectors, deteriorating infrastructure, and a heavy reliance on crude oil exports to finance its national budget. Oil exports constitute a substantial proportion of the country’s GDP. Therefore, the study investigates whether participation in GVCs can stimulate various economic sectors, improve infrastructure, enhance exports and employment levels, reduce reliance on oil revenues, and consequently increase Iraq’s economic growth.
The study hypothesizes that participation in GVCs positively influences economic growth. To achieve its objectives, the research provides a theoretical framework for GVCs, highlights the advantages and disadvantages of participation, and examines the relationship between GVCs and economic growth. Furthermore, the study proposes solutions and policies that Iraq could adopt based on the successful experiences of other countries involved in GVCs.
The findings indicate that participating in GVCs positively impacts economic growth in the studied countries. The industrial sector significantly contributes to local and foreign value-added in exports, demonstrating a reciprocal relationship between GVC participation and industrial performance. Additionally, value-added from services such as innovation, design, marketing, and logistics exceeds that of manufacturing. Connecting the local market to the global market enhances access to advanced intermediate inputs and introduces modern production methods and technologies, boosting local firms’ competitiveness and productivity. Participation in GVCs through forward and backward linkages allows firms to specialize in specific stages of the production process without needing to undertake the entire operation, thus reducing barriers to market entry and enhancing competitive capabilities.
Keywords: Global Value Chains, Economic Growth.
