Second, we analyze how this effect is moderated through external (gender provisions in trade agreements) and internal (investment climate variables) factors. To do so, we use firm-level data for 154 developing economies and emerging markets with a special focus on the Middle East and North Africa region. Our main findings show that GVC integration increases the likelihood of being a female owner and the share of female employees, especially production ones. A less robust negative effect is found regarding the impact on being a female top manager. These effects are moderated by the inclusion of gender provisions in trade agreements and by the characteristics of the investment climate (especially tax policy, courts, access to finance and corruption). These results remain robust after we control for the endogeneity of GVC using an instrumental variable approach and a propensity score estimation method where the treatment is being part of a GVC. Thus, GVCs can be perceived as a tool that boosts women’s empowerment in emerging economies, especially in the MENA region.

The remainder of the paper is organized as follows. Section 2 presents the data we use and some stylized facts on GVCs and women’s participation. Section 3 is dedicated to the methodology and the econometric specification. Section 4 presents the empirical results. Section 5 provides robustness checks. Section 6 concludes and provides some policy implications to increase women’s employment through trade and GVC channels.

# **2. Data and Stylized Facts**

To explore the nexus between firms’ integration into GVCs and women’s trade participation as entrepreneurs and employees, firm-level pooled data from the WBES is used. These surveys cover a broad range of business environment topics such as access to finance, trade, corruption, competition, and infrastructure for 143,598 firms in 154 developing economies and emerging markets. The manufacturing and services sectors are the primary business of interest in these surveys conducted in a range of time that varies from 2006 to 2021 (see Appendix 1). The objective of this section is to provide some descriptive statistics related to the nexus between GVCs and women’s participation.

To define GVCs, we follow the definition of Dovis and Zaki (2020) where the least strict definition includes firms that export and import simultaneously (GVC1). Second, two stricter definitions are related to firms who are simultaneously exporters and importers and have either an international certification (GVC2) or a share of its capital owned by a foreign firm (GVC3). The strictest definition combines the four criteria altogether (GVC4). This variable is a dummy variable that takes a value of one if the firm is part of a GVC and zero otherwise. Based on these definitions, around one-third of firms are part of GVCs with most of them being two-way traders and only 2.3% that are two-way trader, have a foreign capital and an international certification (see Table A1 in Appendix 3). It is important to note that these two definitions help us measure GVC participation at the extensive margin level, not the intensive margin one.

At the regional level (see Figure A1 in Appendix 3), Europe and Central Asia (ECA) is the most integrated region in GVCs (for all definitions) and South Asia the least integrated one. The MENA region, while being slightly better than South Asia, is still far from other top performers such as ECA and Latin American and the Caribbean. This confirms previous findings of the literature on GVCs in the MENA region that is characterized by an unfriendly business climate (Dovis and 4