Global Value Chains in Developing Countries: A Relational Perspective from Coffee and Garments

Laura Boudreau, Julia Cajal-Grossi and Rocco Macchiavello

Journal of Economic Perspectives, 2023, vol. 37, issue 3, 59-86

Abstract: There is a consensus that global value chains have aided developing countries' growth. This essay highlights the governance complexities arising from participating in such chains, drawing from lessons we have learned conducting research in the coffee and garment supply chains. Market power of international buyers can lead to inefficiently low wages, prices, quality standards, and poor working conditions. At the same time, some degree of market power might be needed to sustain long-term supply relationships that are beneficial in a world with incomplete contracts. We discuss how buyers' market power and long-term supply relationships interact and how these relationships at the export-gate could be leveraged to enhance sustainability in the domestic part of the chains. We hope that the lessons learned by combining detailed data and contextual knowledge in two specific chains—coffee and garments—have broader applicability to other global value chains.

JEL-codes: F14 F23 J81 L14 L66 L67 O14 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.aeaweb.org/doi/10.1257/jep.37.3.59 (application/pdf)
https://doi.org/10.3886/E191904V1 (text/html)
https://www.aeaweb.org/doi/10.1257/jep.37.3.59.appx (application/pdf)
https://www.aeaweb.org/doi/10.1257/jep.37.3.59.ds (application/zip)

Related works:
Working Paper: Global value chains in developing countries: a relational perspective from coffee and garments (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aea:jecper:v:37:y:2023:i:3:p:59-86

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

DOI: 10.1257/jep.37.3.59

Access Statistics for this article

Journal of Economic Perspectives is currently edited by Enrico Moretti

More articles in Journal of Economic Perspectives from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().