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Abstract

This thesis examines three aspects of international production. The first chapter evaluates how the trade liberalization of services in China contributed to an increase in the domestic value added of processing exports. The article highlights the role of services in global value chains (GVCs), not only as links, but also as inputs that enable the development of the domestic part of a value chain. This article contributes to the discussion on upgrading in GVCs by shedding light on the importance of services reform. The second chapter explores how domestic financial development can affect the participation and positioning of countries in global value chains. Financial development is shown to lead to more participation in international production sharing, in tasks that are further downstream, with a stronger effect in industries that are more dependent on external finance. These results inform policy recommendations for countries looking to join GVCs. The third chapter highlights the importance of market structures in determining the organizational structure of international production. An empirical exercise finds that thicker upstream and downstream markets are associated to lower shares of intra-firm imports. This link is found to be stronger as inputs are less specific or more contractible. This motivates further research into strategic aspects of multinational production.

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