Global value chain participation and the technology structure of exports: experience from the Central and Southeast European countries

This paper examines the relationship between global value chain (GVC) participation and technology absorption in Central and Southeast European countries from 1996 to 2019, with a particular focus on trade in high-tech products. We construct a novel GVC participation measure using the latest Broad Economic Categories (BEC) classification, which distinguishes between generic and specialized intermediate goods. In addition, we analyze the technological composition of exports at both the country and sectoral levels. Using panel data estimation techniques, we find that stronger participation in GVCs significantly increases the export of high-tech products, with results robust across different specifications, including instrumental variable approaches and controls for innovation, human capital, and institutional quality. The findings highlight the critical role of GVC integration in fostering technological upgrading and suggest that policies supporting deeper participation, combined with investments in innovation and skills, can accelerate long-term economic development in the region.