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Abstract

Participation in global value chains (GVCs) is a key element in the industrialization strategies of many developing nations. This paper investigates the role of services liberalization in promoting participation in GVCs. Using the gravity framework, I examine the impact of services trade agreements on gross trade and GVC-trade (backward and forward participation) in goods. I find that services trade agreements promote both, but especially GVC-trade, although the effects are heterogeneous: the impact is bigger for developing nation exporters. Moreover, services agreements that allow the export of services without local presence (non-establishment rights) are particularly important in fostering GVC participation.

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