When value chains go South: Upgrading in the Kenyan leather sector

Giovanni P. Pasquali

Journal of World Business, 2021, vol. 56, issue 2

Abstract: South-South value chains have grown to play a central role in the organisation of global trade, yet little is known about how this phenomenon affects suppliers’ upgrading prospects. This article theorises whether and how links to North-South and South-South value chains differently affect suppliers’ delivery of product quality and value-added tasks, as well as their improvement over time (respectively defined as product and functional upgrading). To empirically evaluate this question, we draw on a combination of firm-level export data and interviews across the Kenyan leather sector. Results show that product quality and value-added tasks are higher for exports to the North than to the South, but that there is no systematic difference in product and functional upgrading to the two aggregate destinations. Digging deeper, however, we show significant variation in outcomes across Southern destinations. On the one hand, China-led value chains present similar product quality and steeper functional upgrading than North-South value chains. On the other hand, intra-Africa value chains emerge as platforms for small suppliers to specialize in higher value-added tasks. These findings contribute to scholarship on global value chains and the global factory, enhancing our understanding of the implications for suppliers participating in value chains with different product standards and consumer preferences.

Keywords: Global value chains; South-South trade; Upgrading; Kenya; Leather (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (6)

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DOI: 10.1016/j.jwb.2020.101161

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