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Opportunities for development through integration in global value chains? A cross-sectoral and cross-national comparison

Petra Dünhaupt, Hansjörg Herr, Fabian Mehl and Christina Teipen

No 140/2020, IPE Working Papers from Berlin School of Economics and Law, Institute for International Political Economy (IPE)

Abstract: In traditional trade theory, it is generally assumed that the development of export-oriented industries in the Global South can create the conditions for technological spillover effects, productivity increases and social welfare gains. However, based on the results of comparative case studies in four sectors (apparel, automotive, electronics and IT services) and six emerging and developing countries (Bangladesh, Brazil, China, India, South Africa, Vietnam), successful economic integration into global value chains is not necessarily associated with better working conditions, nor with positive employment and welfare effects. It also becomes clear that the country-specific context of a particular industry plays a greater role in determining these effects than is often assumed. Here the decisive factors are in particular the national system of industrial relations and the power of trade unions. At the same time, it can be asserted from this study that without coherent industrial policy strategies it is not possible to realize the opportunities for development that arise as a product of deeper integration into the global economy.

Keywords: Trade Theory; Economic Development; Global Value Chains; EconomicUpgrading; Social Upgrading (search for similar items in EconPapers)
JEL-codes: F10 F63 O57 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-cse, nep-gen, nep-int and nep-sea
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