Essays on global value chains and economic development

This thesis examines how international economic integration affects firm performance, spatial development, local labour markets and household well-being in low-income economies, with a focus on Sub-Saharan Africa. Drawing on original empirical and geospatial analyses across three papers, it specifically investigates the role of Global Value Chains (GVCs), Foreign Direct Investment (FDI) and Special Economic Zones (SEZs) in shaping development outcomes at the firm, place, and individual level. The first paper explores how GVC participation relates to firm-level upgrading in Africa, drawing on data from over 20,000 firms in 43 countries covered by the World Bank Enterprise Surveys (WBES). It finds that firms integrated into GVCs are significantly more likely to engage in economic, environmental and social upgrading. The effects differ by country income level and ownership type: foreign-led GVCs drive upgrading in low-income settings, while domestic GVC firms lead in middle-income contexts. The second paper assesses the local economic impact of Ethiopia’s extensive SEZ programme. Using a combination of remotely sensed and geo-localised household data from the Living Standards Measurement Study (LSMS) programme, it exploits the staggered rollout of SEZs in a difference-in-differences framework. The paper finds substantial but highly localised increases in economic activity and wealth, as captured by nighttime lights, residential urbanisation rates, and reductions in the share of unlit settlements. At the household level, I find evidence of substantial increases in household consumption, improvements in dietary diversity, and a shift in employment away from farm labour towards wage labour. The final paper links foreign investment to labour market outcomes using geocoded FDI project data and household survey data from the Demographic and Health Surveys (DHS) and focuses on the effects of FDI on female labour force participation. The paper finds modest positive and localised employment effect but identifies substantial heterogeneities. FDI is associated with significant increases in the labour force participation rates of women and linked to changes in fertility decisions and greater women’s influence over household finances. Together, the papers provide new micro-level evidence on how GVC-related integration intersects with industrial policy in low-income countries undergoing late industrialisation.