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Value chain dynamics, local embeddedness, and upgrading in the clothing sectors of Lesotho and Swaziland

Mike Morris, Cornelia Staritz and Justin Barnes

International Journal of Technological Learning, Innovation and Development, 2011, vol. 4, issue 1/2/3, 96-119

Abstract: This paper assesses the implications for upgrading of integration into two distinct clothing value chains in Lesotho and Swaziland – the value chain characterised by Taiwanese investment and feeding into the US market under the African Growth and Opportunity Act (AGOA) and the value chain characterised by South African investment and feeding into the South African market. These value chains differ with regard to ownership patterns, end markets, governance structures, retailers' demands, and investors' motivations. These different characteristics have crucial impacts on upgrading possibilities, including functional, process and 'local' upgrading. Thus, from the perspective of upgrading and sustainability, ownership patterns, local embeddedness and market diversification matter. The emergence of South Africa as an alternative end market and the different value chain dynamics operating in the South African retailer-governed value chain opens up new opportunities from those of the AGOA/Taiwanese-dominated value chain.

Keywords: global value chains; GVCs; foreign direct investment; FDI; market diversification; African Growth and Opportunity Act; AGOA; apparel industry; clothing industry; garment industry; Sub-Saharan Africa; SSA; value chain dynamics; local embeddedness; upgrading; Lesotho; Swaziland; apparel value chains; South Africa; ownership patterns; end markets; governance structures; retailer demands; investor motivation. (search for similar items in EconPapers)
Date: 2011
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Handle: RePEc:ids:ijtlid:v:4:y:2011:i:1/2/3:p:96-119