“…For example, studies suggest that firms that trade tend to be larger, earn higher profits, spend more on R&D, and pay higher wages than firms that do not (Bernard, Jensen, Redding and Schott, 2007). Access to a range of competitively priced foreign intermediate goods has been crucial to achieving higher productivity in both OECD and emerging countries such as India and China (Miroudot, Lanz and Ragoussis, 2009;Goldberg, Khandelwal, Pavcnik and Topalova, 2010). Trade, investment and knowledge flows that underpin GVCs can provide mechanisms for rapid learning, innovation and industrial upgrading in developing countries (Lall, 2000;Humphrey and Schmitz, 2002).…”