Abstract
We analyze the relationship between domestic value chains (DVCs) and global value chains (GVCs). We study whether the development of DVCs has an effect on – or can even be considered a precondition for – the integration into GVCs. We provide evidence that DVC integration positively affects GVC integration. In other words, a functioning DVC is an important determinant for a successful integration into GVCs. The results hold in particular for backward linkages, namely, when intermediates sourced from abroad are used as proxy for GVC integration.
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