A study of industrial upgrading using global commodity chains

Wider adoption of open source hardware technology used for digital fabrication such as 3D printers like the RepRap has the potential to partially reverse the trend towards global specialization of production systems into elements that may be geographically dispersed and closer to the end users localization and thus disrupt global value chains.

As capabilities in many low- and middle-income economies have grown, chain governance has tended to move away from quasi-hierarchical models toward modular type as this form of governance reduces the costs of supply chain management and allows chain governors to maintain a healthy level of competition in their supply chains.

Some authors [5] argue that the expected upgrading process might not hold for all types of upgrading. This encouraged the World Bank and other leading institutions to encourage developing firms to develop their indigenous capabilities through a process of upgrading technical capabilities to meet global standards with leading multinational enterprises MNE playing a key role in helping local firms through transfer of new technology, skills and knowledge.

Quasi-hierarchical or captive chains involve suppliers or intermediate customers with low levels of capabilities, who require high levels of support and are the subject of well-developed supply chain management from lead firms often called the chain governor.

Different from what is expected, facts presented in the paper imply that although global value chains and upgrading are confirmed as useful concepts, not all the findings the literature presents converge with what this research brings.

Previous article in issue. Subsequently, the process of upgrading might also cover inter-sectoral upgrading.

Global value chain

Hierarchical chains represent the fully internalised operations of vertically integrated firms. We employed the multiple case study method researching eight IT firms to study the issue.

In other results, we confirmed what is in the literature, most notably, having the evolution in the chain blocked by clients and also competitive marginalization.

However, whilst it maintains short-term competition in the supply chain, it has allowed some leading intermediaries to develop considerable functional competences e.

A report found that looking at the production chain, rather than the individual stages of production, is more helpful. Specifically they argue upgrading into design, marketing and branding might be hindered by exporting under certain conditions because MNEs have no interest in transferring these core skills to their suppliers thus preventing them from accessing global markets except as a supplier for first world customer.

Whilst this was often the case in quasi-hierarchical chains with considerable customer power it has become apparent that some firms operate in multiple value chains subject to multiple forms of governance and serve both national and international markets and that this plays a role in the development of firm capabilities Navas-Aleman, ; [9] UNCTAD The research suggests they adjust their priorities and modalities to the way production chains operate, and to coordinate with other donors to cover all trade needs.

In this paper, we have the objective of examining the occurrence and quality of upgrading in internationalized Information Technology firms of Brazilian origin.

It calls for donors and governments to work together to assess how aid flows may affect power relationships. Current research on governance and its impact from a development perspective[ edit ] There are motivations behind renewed interest in global value chains and the opportunities that they may present for countries in South Asia.

In development[ edit ] The first references to the GVC concept date from the mids and were enthusiastic about the upgrading prospects for developing countries that joined them. Market chains represent the classic arms length relationships found in many commodity markets. In the long term these have the potential to emerge as competitors to their original chain governor Kaplinski, Current research suggests that GVCs exhibit a variety of characteristics and impact communities in a variety of ways.

Similar to any research, this one has limitations, which we list at the end of the manuscript. As for example, results do not converge with what was found in the literature for clothing.Globalization has been promoted by industrial and commercial firms alike, which have established two distinct types of international economic networks that have been called "producer-driven" and "buyer-driven" global commodity.

Automobile Commodity Chains in the NICs: A Comparison of South Korea, Mexico, and Brazil Publication Brazilian Manufacturing in International Perspective: A Global Value Chain Analysis of Brazil's Aerospace, Medical Devices, and Electronics Industries.

Global commodity chains consist of a number of ‘nodes’ or operations that comprise pivotal points in the production process: raw materials supply, production, export, and marketing, taking us “across the entire spectrum of activities in the world-economy” (Gereffi, 94).

AbstractMany low-income countries are integrated into apparel global value chains through foreign direct investment (FDI), including Lesotho, which has become the largest Sub-Saharan African apparel exporter to the US under the African Growth and Opportunity Act. More recently, South Africa has emerged as a new apparel export.

Environmental upgrading of apparel firms in global value chains: Evidence from Sri Lanka

In development studies, the concept of a value chain has been used to analyse international trade in global value chains which comprises “the full range of activities that are required to bring a product from its conception, through its design, its sourced raw materials and intermediate inputs, its marketing, its distribution and its support to the.

The issue of upgrading in global value chains has been treated in the literature, but there are still gaps to be filled in. One issue that still needs further investigation is the relation of business strategy and evolution of firms in global value chains, known as .

A study of industrial upgrading using global commodity chains
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