A value chain is a chain of necessary activities that a company operating in a specific industry executes in order to deliver a valuable product or service for the market. Value chain plays essential role for development of a successful business unit. This paper presents an empirical investigation to study the effects of value chain on capabilities of knowledge production, implementation and distribution. The impact is also studied for effective knowledge implementation for economic development. Using historical economic data of World Bank database gathered from member countries of the Organization of Islamic Cooperation, the study has detected positive and meaningful effects of Value Chain Presence on Knowledge Economy Index and Knowledge Index.