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Rural Transformation, GVCs and the Rise of the Services Economy

Year: 2025

Type: article

Abstract: ABSTRACT The rise of global agricultural value chains presents both opportunities and challenges for rural transformation and economic development. In this regard, we propose that the expansion of the service sector in developing countries significantly influences the development of agricultural value chain, promoting wealth creation. We posit that when global value chains in agriculture are used to interpret rural transformation, the crucial function of services is often underemphasised. We construct an interaction term between the productivity dynamics in services and the evolution of global value chain (GVC) over time. The key finding suggests that the coevolution of service sector development and participation in GVC strongly correlates with increases in agricultural sector productivity. The analysis highlights the importance of considering the stage of development and the specific service subsectors when examining the relationship between services, GVC and rural transformation. We propose that enhancing the institutional environment, particularly with respect to contracts within such value chains, enables a larger role for domestic actors in capturing this value.

Source: Asia & the Pacific Policy Studies

DOI: 10.1002/app5.70018

Authors: Christopher Findlay, Hein Roelfsema

Institutions: Australian National University, Saxion

Language: English

Topic: Global trade, sustainability, and social impact

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure, Zero hunger

Open Access status: gold

Estimated APC paid: $1,810