Assessing the impact of Global Value Chains (GVC) on the development of local linkages in the mining sector

Abstract

This study explores the impact of the mining sector’s integration into Global Value Chains (GVCs) on its linkages of mining with other local industries.

Using data from 14 countries, the study analyses backward linkages and examines two measures of GVC integration: GVC participation and GVC position. The analysis finds that while both GVC participation and position influences local linkages, their effects remain inconclusive. The main findings suggest that it is the nature of the GVC integration, that is, forward — which reflects the extent to which mining exports are used in other countries’ production processes — and backward integration — which measures the reliance of the mining sector on foreign inputs — that determine their impact on local linkages, rather than GVC participation or position alone

The study contributes to understanding how mining’s role in GVCs can influence broader economic development. It suggests that policy measures should focus on promoting backward integration, encouraging local industrial development, and reducing the dependency on raw material exports, thus supporting economic diversification.