EconPapers    
Economics at your fingertips  
 

New Technologies, Global Value Chains, and Developing Economies

Dani Rodrik

No 25164, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Many of the exports of developing countries are channeled through global value chains (GVCs), which also act as conduits for new technologies. However, new capabilities and productive employment remain limited so far to a tiny sliver of globally integrated firms. GVCs and new technologies exhibit features that limit the upside and may even undermine developing countries’ economic performance. In particular, new technologies present a double whammy to low-income countries. First, they are generally biased towards skills and other capabilities. This bias reduces the comparative advantage of developing countries in traditionally labor-intensive manufacturing (and other) activities, and decreases their gains from trade. Second, GVCs make it harder for low-income countries to use their labor cost advantage to offset their technological disadvantage, by reducing their ability to substitute unskilled labor for other production inputs. These are two independent shocks that compound each other. The evidence to date, on the employment and trade fronts, is that the disadvantages may have more than offset the advantages.

JEL-codes: O30 O40 (search for similar items in EconPapers)
Date: 2018-10
New Economics Papers: this item is included in nep-cse, nep-int, nep-pke and nep-tid
Note: DEV EFG ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (90)

Downloads: (external link)
http://www.nber.org/papers/w25164.pdf (application/pdf)

Related works:
Working Paper: New Technologies, Global Value Chains, and the Developing Economies (2018) Downloads
Working Paper: New Technologies, Global Value Chains, and Developing Economies (2018) Downloads
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:nbr:nberwo:25164

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w25164

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().

 
Page updated 2024-03-31
Handle: RePEc:nbr:nberwo:25164