Trade, global value and upgrading: What, when and how?
Gehl Sampath,Padmashree Vallejo,B.
Gehl Sampath,Padmashree
Vallejo,B.
Abstract
This paper explains how successful innovation systems interact with trade and GVC participation to foster learning and technological upgrading. It is based on an empirical investigation of 74 developing countries for three years, 2000, 2005 and 2010, to show that while some countries manage to trade and export across a large number of technological export categories, many remain embedded in the export of low technology goods with little movement technologically. The analysis looks at why this is the case and what factors account for how firms are able to leverage trade to learn and upgrade in some instances, but not all. The results show that the ability to technologically diversify across export categories is linked to stronger innovation systems, as measured by national capability indicators, such as public R&D investments, scientific publications, intellectual property payments and patents by residents. The results also confirm the rise of several outperforming countries, the emerging economies. We conclude that in successful, outperforming countries, firms rely on several attributes of the innovation system to leverage knowledge flows within and outside of GVCs to build export capacity and diversify horizontally into new GVCs.
Description
Date
2018-07
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
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Journal Issue
Keywords
Trade, Global Value Chains (GVC), technological capabilities, learning, upgrading, Developing Countries, least developed countries (LDCs), structural change, Diversification, SDG 9 - Industry, Innovation, and Infrastructure, SDG 17 - Partnerships for the Goals
Citation
Gehl Sampath, P & Vallejo, B 2018, 'Trade, global value and upgrading : What, when and how?', European Journal of Development Research, vol. 30, no. 3, pp. 481-504. https://doi.org/10.1057/s41287-018-0148-1