Trade, global value and upgrading

What, when and how?

Padmashree Gehl Sampath, B. Vallejo

Research output: Contribution to journalArticleScientificpeer-review

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.
Original languageEnglish
Pages (from-to)481-504
Journal The European Journal of Development Research
Volume30
Issue number3
DOIs
Publication statusPublished - Jul 2018
EventInnovation systems in the era of global value chains - Aalborg University, campus Copenhagen, Copenhagen, Denmark
Duration: 24 Apr 201725 Apr 2017

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global trade
innovation
Values
firm
intellectual property
patent
learning
developing world
developing country
resident
participation
economy
ability
knowledge

Keywords

  • Trade
  • Global Value Chains (GVC)
  • technological capabilities
  • learning
  • upgrading
  • Developing Countries
  • least developed countries (LDCs)
  • structural change
  • Diversification

Cite this

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title = "Trade, global value and upgrading: What, when and how?",
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.",
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Trade, global value and upgrading : What, when and how? / Gehl Sampath, Padmashree; Vallejo, B.

In: The European Journal of Development Research , Vol. 30, No. 3, 07.2018, p. 481-504.

Research output: Contribution to journalArticleScientificpeer-review

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