GLOBAL VALUE CHAIN, ECONOMIC INTEGRATION AND ECONOMIC DEVELOPMENT

IMPLICATION FOR ECOWAS

Abstract

This study examined the effect of Global Value Chain and economic integration on economic 
development in selected ECOWAS countries. This paper used a Linear Panel Autoregressive 
Distributed Lags/Pooled Mean Group (ARDL/PMG) approach to determine the effect of 
Global Value Chain and economic integration on economic development among ECOWAS 
countries between 1995 and 2022. From the panel ARDL/PMG estimation, we found that in 
the long run, Global Value Chain and Foreign Direct Investment have significant long-run 
relationship with GDP per capita among selected ECOWAS countries. A 1% increase in Global 
Value Chain and Foreign Direct Investment will increase the GDP per capita by 31% and 16% 
respectively among the selected ECOWAS countries. The short run result revealed that Global 
Value Chain and Domestic Credits to Private sector have contradictory relationship with GDP 
per capita. While Global Value Chain revealed positive relationship, Domestic Credits to 
Private sector showed negative relationship. The speed of adjustment of the economic 
development function to equilibrium in the event of disequilibrium in the short run is 43%. 
Given the findings, this study recommends a more vibrant participation of ECOWAS member 
countries in Global Value Chain and economic integration considering its resultant positive 
effect on economic development.