Maertens, Miet Colen, Liesbeth Swinnen, Johan F.M.
Year of Publication:
LICOS Discussion Paper 217
There is no consensus about how globalization -trade and foreign investments ?affects poverty reduction. Using household survey data, this study contributes to the empirical literature on globalization and poverty by analyzing the household-level implications of increased foreign investments and trade in the horticulture sector in Senegal. In many aspects this represents what many would consider a 'worst-case scenario? Stringent rich country standards are imposed on exports and the supply chain is controlled by a single multinational company with extreme levels of supply base consolidation and vertical integration and complete exclusion of smallholder suppliers. We analyze and quantify income and poverty effects under these 'worst-case conditions?and find significant positive welfare impacts through employment creation and labor market participation.
trade FDI poverty vertical coordination modern supply chains