Economic upgrading in global value chains

Abstract

This paper has critically documented a vast literature addressing the multi-layered outcomes associated with participating in global value chains (GVCs). In particular, this paper reviews and synthesizes the definitions and quantitative measures of one particular dimension of the GVC analysis that is two-fold: the economic and social upgrading. More specifically, we discuss the economic perspective of upgrading, which is usually associated with “moving into higher value-added stages”, and it is commonly assumed to be followed by positive spillovers regarding technology and productivity. This paper emphasizes the important diversity of definitions and measures within the GVC literature, considering it as a reflection, to a certain extent, of the absence of a systematic theoretical apparatus in the GVC literature. The paper concludes with some considerations on the role of policymakers in promoting social upgrading as an important topic in the GVC research agenda.

The Made in China 2025 amid hyperglobalization: upgrading, intangible assets, and internationalization strategies

“…(14) See Marcato and Baltar (2020) to find more about the other three trajectories (process upgrading, product upgrading, and chain (or inter-sectoral) upgrading).…”

“…GVC upgrading is mostly framed in terms of comparative performance in capturing a greater share of value-added along international supply chains. This understanding ignores the dynamics related to the pace of technological change and does not address the social dimension of upgrading, or its political implications (see Baltar, 2020). Moreover, the potential gains regarding knowledge creation and absorption may be crucial to maximizing the benefits of participating in international production chains.…”

Weak sectors and weak ties? Labour dependence and asymmetric positioning in GVCs

“…Scholars have largely focused on investigating the bene ts of reducing costs and increasing e ciency due to offshoring, often with a rm-level perspective. Within the broader concept of economic upgrading, which refers to the possibility for rms, regions or countries to move into higher value-added stages or to make better products or more e ciently, eventually triggering spillovers for productivity and innovation, the literature has focused on economic upgrading de ned as the general economic gain from participating in GVCs (Kaplinsky and Morris, 2000;Gere , 2005;Giuliani et al, 2005; OECD, 2013; Pipkin and Fuentes, 2017; Marcato and Baltar, 2021). Recently, scholars in GVCs literature have started addressing also the social dimension of upgrading which relates to the impact on employment, wages, working conditions, workers' rights (Selwyn, 2013;Lee and Gere , 2015).…”

“…Other channels are organizational, territorial and structural upgrading (UNIDO, 2015) or entry into a GVC by a new actor (Fernandez-Stark et al, 2014) and end-marketing upgrading. Marcato and Baltar (2021), describing different forms of upgrading, point out that, particularly the end-market scope reveals a naive notion of upgrading rooted in the idea of higher rooms of appropriations of products' value via GVCs participation. The very same view is also shared by the so-called smile-curve climbing, according to which a strategic participation into GVCs would imply moving away from assembly production stages, given the low value added, toward pre-(R&D, design) or post-(branding, marketing) production activities (Baldwin, 2013;Ye et al, 2015).…”

New insights on the relationship between the involvement of countries in global value chains, and intra- and inter-country inequalities

“…However, while the characterization of countries in global chains, their evolution and their relationship to economic performance (economic upgrading) has been widely discussed in the literature, it is only recently that the implications for social upgrading have been studied (Smichowski et al, 2021;Marcato and Baltar, 2017). And as far as we know, there are very few studies that have connected metrics of GVC participation with income inequality.…”