Handbook on Global Value Chains
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Handbook on Global Value Chains

Edited by Stefano Ponte, Gary Gereffi and Gale Raj-Reichert

Global value chains (GVCs) are a key feature of the global economy in the 21st century. They show how international investment and trade create cross-border production networks that link countries, firms and workers around the globe. This Handbook describes how GVCs arise and vary across industries and countries, and how they have evolved over time in response to economic and political forces. With chapters written by leading interdisciplinary scholars, the Handbook unpacks the key concepts of GVC governance and upgrading, and explores policy implications for advanced and developing economies alike.
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Chapter 31: Industrialization paths and industrial policy for developing countries in global value chains

Mike Morris and Cornelia Staritz


Structural transformation to higher productivity and value-added activities remains a key objective for developing countries. Industrial policy has historically had an important role in supporting such transformation processes. Today, the external context is fundamentally different with the rise of global value chains (GVCs). This requires a reconceptualization of how GVCs shape industrialization paths and industrial policy options in developing countries. The chapter does this by (1) providing a critical discussion of opportunities and challenges for industrialization in developing countries related to the rise of GVCs; (2) highlighting the importance of different GVC types and of the contested nature of upgrading; and (3) stressing industrial policy implications relating to the importance of connecting to and leveraging lead firms, of thinning, stretching and thickening in different GVC types and integration phases, of strategically linking global, regional and domestic markets, and of building locally embedded productive capacities.

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