Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/301953 
Year of Publication: 
2024
Series/Report no.: 
ADBI Working Paper No. 1448
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
This study explores the nexus of digitalization, formalization, and global value chain (GVC) participation, providing critical insights into inclusive growth. Despite the importance of the nexus, common notions regarding the positive effects of digitalization on enterprise formalization and GVC participation have been inferred without sufficient empirical support, while few studies have examined the reciprocal impact of formalization on GVC participation. Utilizing probit and tobit estimations with cross-sectional firm-level data from the World Bank's Enterprise Surveys spanning 28 Asia and the Pacific countries and approximately 20,000 small and medium-sized enterprises (2008-2018), the findings reveal that enterprises adopting digital connectivity, such as email or website technologies, are more likely to operate formally. Formalization not only facilitates GVC participation but also deepens such engagement. This underscores the pivotal role of digitalization and formalization in enabling meaningful GVC involvement. Based on the estimated results, the policy priority should be policy measures enhancing informal enterprises' fundamental digitalization as they are cost-effective and can concurrently promote the formalization of enterprises and their GVC participation. In addition, policy measures that foster labor productivity and formalization can be implemented as supporting policies.
Subjects: 
digitalization
firm-level analysis
formalization
global value chains
informal enterprises
JEL: 
D21
F14
L26
O17
O24
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.