Assessing the gains from moving along the global value chain

This paper develops a framework to evaluate the potential economic gains from deeper participation in global value chains (GVCs). The approach combines measures of revealed comparative advantage with estimates of value-added distribution along GVCs to identify opportunities for upgrading into higher–value-added production stages. It then quantifies the long-term economic effects of such upgrading using a structural gravity model. The framework is applied to Costa Rica’s electronics sector, a key focus of the country’s strategy to expand its role in the semiconductor value chain. The findings indicate that strengthening Costa Rica’s position within the electronics GVC could lead to substantial long-term increases in exports, output, and real wages.