Exporting higher-quality and complex products are deemed pathways to economic growth and development. However, producing such products are knowledge-intensive and require quality intermediate inputs and advanced technologies. Integration into global trade networks is increasingly argued to be amongst the pathways to obtain such inputs and technologies, although not all countries may benefit equally from such integration. This paper builds on these arguments and investigates how participation in the global value chain (GVC) affects export-quality. We use a sample of 120 developed and developing countries and find that participation in GVC impacts positively on export quality and, also, brings the export quality of countries closer to the quality frontier, but these effects only work through backward linkages. While this result persists in the sub-sample comprising developing economies, we, however, find that developed countries benefit from both forward and backward linkages in GVC. Overall, the results indicate that GVC participation matters to export upgrading but points to a potential heterogeneity on the channel of impact across countries at different levels of development.

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Several existing studies have documented a negative relationship between firm financial constraint and export activities but do not attempt to examine factors that could attenuate this relationship in Africa. In this paper, we examine the effect of financial constraint on exports in Africa and explore how the level of trust in countries where firms are located shapes this relationship. We combine the World Bank Enterprise Surveys with different measures of country-level personal and interpersonal trust computed from the Afrobarometer surveys of 19 African countries. Our results show that financial constraints negatively affect export activities. However, this negative effect is attenuated for firms that are located in trust-intensive societies. These findings are robust to different specifications. Interestingly, we find that small and medium-sized enterprises in Africa are more likely to be affected by financial constraints but also more likely to benefit from a higher level of both personal and interpersonal trust, while for larger firms only interpersonal trust matters.