What Place does Luxembourg hold in Global Value Chains?

This publication analyses the place held by Luxembourg in global value chains (GVC) by relying on trade in value added data retrieved from OECD inter-country input-output tables, available over the period 1995-2011. The analysis is multifaceted as the role of Luxembourg in GVC is analyzed across 50 advanced and emerging market economies, at the country level, at the sector level and over time. Results show that Luxembourg acts as an important chain-link in GVC as evidenced by its strong upstream and downstream interconnections with other partner countries. Luxembourg is primarily a buyer of foreign value added and less a seller of domestic value added.

The analysis unveils that Luxembourg possesses a comparative advantage in GVC in the finance and insurance industry. It is from the latter sector that the country retrieves the most important share of value added from GVC participation.