In the last three decades, the global economy has witnessed an ambivalent phenomenon of integration through disintegration. Whilst the amount of regional and global trade dramatically increased, vertical specialisation prompted the outsourcing of manufacturing, assembling, and other business functions regionally and globally. The slicing up of value chains and the consequent surge in trade of intermediate goods drew the attention of scholars interested in the economic, social, and environmental consequences of this phenomenon. Yet, most of the literature on value chains has concentrated on the institutional and market linkages between firms in developed economies and delocalised suppliers in the global South. Conversely, less attention has been paid to the rise in South-South trade that accompanied the development of South- South and regional value chains. The following chapters provide new evidence on the opportunities and constraints that participation in value chains across North-South, South-South, and regional trajectories entails for local suppliers in developing countries. This is achieved by means of a mixed-methods approach that combines firm-level export data with over 100 semi-structured interviews across the Kenyan leather sector. On the one hand, results show how North-South value chains are characterised by more profitable and stable relationships between buyers and local suppliers. Nonetheless, whilst defined by higher product and process standards, linkages with developed economies appear to prevent rather than encourage local value addition. On the other hand, South-South value chains are governed by instability and distrust underpinned by pressures to reduce prices and lack of upgrading opportunities. Like the global South, regional value chains are characterised by fierce competition and low profitability. Even so, they often constitute an alternative for small suppliers willing to venture into new products and functions. Particularly, the local and regional markets represent an upgrading platform for innovative firms whose low capital endowments prevent them from accessing premium North-South value chains. In this case, industrial policy and entrepreneurship play a crucial role in enabling smallholders to upgrade in a competitive environment.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:748975 |
| Date | January 2018 |
| Creators | Pasquali, Giovanni |
| Contributors | Sanchez-Ancochea, Diego ; Fu, Xiaolan ; Gollin, Douglas ; Nadvi, Khalid |
| Publisher | University of Oxford |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://ora.ox.ac.uk/objects/uuid:7ca1890f-3644-419d-8380-103e43fd7670 |
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