Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/203149 
Year of Publication: 
2019
Series/Report no.: 
Working Paper No. 124/2019
Publisher: 
Hochschule für Wirtschaft und Recht Berlin, Institute for International Political Economy (IPE), Berlin
Abstract: 
Global Value Chains (GVCs) started to play an increasing and key role in the global economy from the 1990s on. The market mechanism in GVCs supports industrialisation in the Global South and under certain conditions product and process upgrading. But GVCs do not lead to the catching-up of countries in the sense of them approaching real GDP per capita levels comparable with developed countries. These arguments are supported by a critical interpretation of the traditional trade theory, the New Trade Theory and specific approaches to explain GVCs, especially different governance structures and power relationships. Several case studies support these arguments. For catching-up, countries need comprehensive horizontal and vertical industrial policy and policies for social coherence. The small number of countries which managed to catch up did this in different variations.
Subjects: 
Global Value Chains
Under-development
Rent-seeking
Industrial Policy
JEL: 
F16
F23
O19
O25
Document Type: 
Working Paper

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