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Local innovation and global value chains in developing countries

Valentina De Marchi (), Elisa Giuliani () and Roberta Rabellotti ()

No 22, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: The GVC approach has stressed that inter-firm linkages within GVCs can play a crucial role in transferring technological knowledge and promoting innovation. However, the exact nature of these GVC inter-firms relationships, and their impact on the learning and innovative processes of firms involved in such GVCs in developing countries is still controversial and rather understudied. In this paper we argue that to investigate whether and how firms involved in GVCs (as well as industrial clusters, regions and countries) innovate, scholars should not focus entirely on GVC characteristics and the role of lead firms, but they also should take into account domestic technological capabilities at the firm, industrial cluster/regional and local innovation system-levels. In this study we undertake a systematic review of the literature on GVCs in developing countries to investigate if and how innovation has been undertaken at the local level. With cluster analysis, we have identified three types of GVCs, defined as (a) GVC-led Innovators, consisting of innovative local firms, which intensively use knowledge sources from within the GVC; (b) Independent Innovators also consisting of innovative firms, but whose learning sources mainly come from outside the GVC; c) Weak Innovators, including a large group of scarcely innovative firms, drawing selectively on some of the knowledge sources available within the GVC but poorly using other forms of learning.

Keywords: Local Innovation; Upgrading; Global Value Chains; Developing Countries (search for similar items in EconPapers)
JEL-codes: O14 O19 O33 O38 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-geo, nep-ino, nep-sbm and nep-tid
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
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