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Handbook Value Chain Research

Handbook Value Chain Research

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Published by: winston on Apr 14, 2009
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08/01/2012

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The third major reason why value chain analysis is important is that it helps to explain
the distribution of benefits, particularly income, to those participating in the global
economy. This makes it easier to identify the policies which can be implemented to
enable individual producers and countries to increase their share of these gains. This
is an especially topical issue at the turn of the millennium and has captured the
attention of a wide variety of parties. Invariably the debate is polarised between two

Guide Questions 2

As trade barriers decline, what factors determine access to final product
markets?
How important are ethnic links in connecting producers to final markets?
How might the way in which producers connect to final markets affect their
capacity to change their mix of activities, or the links which they perform in
the value chain?
To what extent does the competitive positioning of TNCs affect the
capacity of locally-based producers to enter global markets?

Further reading

For a discussion of changing trade barriers, particularly in relation to the EU, see:

Stevens, C. and J. Kennan (2001), "Post-Lome WTO-Compatible Trading Arrangements",
Economic Paper No 45, London: Commonwealth Secretariat.

The competitive oligopolistic positioning of TNCs is an ongoing process with strong
historical roots:

Hymer S (1975), “The Multinational Corporation and the Law of Uneven Development” in
H Radice (ed), International Firms and Modern Imperialism, London, Penguin.

An example of how different origins of TNC ownership can affect connectedness to
global; markets can be see from the recent experience of South African auto industry

Barnes J. and Kaplinsky R (2000), “Globalisation and the death of the local firm? The
automobile components sector in South Africa”, Regional Studies, Vol. 34, No. 9, 2000,
pp. 797-812., 2000

The role played by ethnicity in global value chain sourcing is described in:

Saxenian, A (1996), Regional Advantage, Cambridge, Mass: Harvard University Press.

The role played by triangular manufacturing in the clothing value chain is described in

Gereffi, G (1999), “International Trade and Industrial Upgrading in the Apparel
Commodity Chain”, Journal of International Economics, Vol. 48, No. 1, pp 37-70.

15

PART 1: BASIC DEFINITIONS AND CONCEPTS

views – globalisation is good for the poor or globalisation is harmful for the poor. Yet
this is much too simplistic a perspective, since it is less a matter of globalisation being
intrinsically good or bad, than how producers and countries insert themselves in the
global economy. Understanding why this is the case – and how value chain analysis
can help both understand these dynamics (positive analysis) and then fashion an
appropriate policy response (normative analysis) - requires a detour in the discussion,
identifying the dangers arising from a harmful pattern of insertion into the global,
economy.

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