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This study investigates the relationship between export sophistication and economic performance using a panel data from 64 countries over 2005–2015. Following a dynamic GMM approach, strong evidence of the positive effect of the manufacturing sector on countries’ economic performance is found. Similarly, high tech and ICT exported goods have a positive and significant effect on income. Relying on TiVA indicators gives new insights into countries’ Global Value Chains (GVCs) participation gains. Backward linkages are shown to be strongly income enhancing. Forward linkage effects are mixed, depending on the end use of the exported domestic value-added, suggesting that countries should not take GVCs’ benefits for granted and should consider interventionist policies in order to climb the sophistication ladder and develop more valuable parts of the value chain.

Export sophistication and economic performance, new evidence using TiVA database