Multinational and domestic firms’ participation in food global value chains: does institutional quality matter

This study provides empirical evidence on the role of institutional quality in driving countries’ participation in Global Value Chains (GVC) by distinguishing domestic from multinational firms (MNEs). Drawing on the Analytical Activities of MNEs (AMNE) database by OECD, we use a panel gravity framework to assess whether institutional quality improves GVC firms’ participation in the food, beverages, and tobacco industry and whether the responsiveness to changes in institutional quality of domestic firms differs from that of multinational firms. The findings show that institutional quality improves GVC participation and that responsiveness varies with the nature of the firm originating in the flows.