Economic and Social Upgrading in Global Value Chains: Insights from Philippine Manufacturing Firms

2018 ◽  
Vol 2018 ◽  
Author(s):  
Adrian R. Mendoza
Keyword(s):  
Statistical Significance ◽  
Global Value Chains ◽  
Labor Cost ◽  
Value Chains ◽  
Probit Regression ◽  
Skilled Workers ◽  
Labor Conditions ◽  
Skill Intensity ◽  
Economic Upgrading ◽  
Social Upgrading

This study explores results of the 2012 Survey on Adjustments of Establishments to Globalization (SAEG) to analyze the economic and social upgrading experience of Philippine manufacturers within global value chains (GVCs). Three broad patterns emerge from the data. First, firms with stronger GVC linkages tend to have better labor indicators than purely domestic producers. Second, the majority of manufacturers either experienced or missed economic and social upgrading simultaneously. Lastly, almost all social upgrading is accompanied by economic upgrading but economic upgrading may take place without a social component. Against this background, this study uses bivariate probit regression to model the joint determination of the two separate but interconnected upgrading outcomes. The results indicate that the covariates in the model can be categorized based on their statistical significance: purely economic (i.e., employment size, unit labor cost, high skill intensity, and the Kaitz dummy), purely social (i.e., training, female intensity, and foreign equity), and both (i.e., contractualization, and process and product innovations). These results have several important implications. First, GVC firms’ notion of social upgrading is closer to the softer components of working conditions than to traditional measurable indicators such as employment, wages, and efficiency. Second, the results suggest direct and indirect channels through which technological upgrading may generate desirable social outcomes: the direct channel highlights that innovation should be accompanied by skills development to sustain higher value creation while the indirect channel underlines the potential of innovation to create upward spirals in output, productivity, and, ultimately, labor conditions. Lastly, there are some indications that the social benefits of economic upgrading may not be evenly distributed among different types of employment. Overall, the results emphasize the need for a holistic upgrading experience that shifts the country’s comparative advantage from cheap labor to innovative local industries and highly skilled workers.

scholarly journals ECONOMIC AND SOCIAL UPGRADING OF DEVELOPING COUNTRIES IN GLOBAL VALUE CHAINS

2021 ◽  
Vol 7 (1) ◽  
pp. 52-61
Author(s):  
K. S. Volkova
Keyword(s):  
Developing Countries ◽  
Working Conditions ◽  
Trade Unions ◽  
Global Value Chains ◽  
Added Value ◽  
Value Chains ◽  
Skilled Workers ◽  
Public Attention ◽  
And Gender ◽  
Social Upgrading

The issue of overexploitation in developing countries in the era of Global value chains (GVC ) is directly related to the question of the relationship between the economic and social upgrading of countries in GVC. The relevance of this topic is due to its  narrow representation in the scientific field, as well as the persistence of a low standard of labor force’s living in developing countries, despite the growth in labor productivity and the transition to the production of goods with higher added value. This article examines the problems faced by low-and medium-skilled workers in developing countries, including extremely low wages, social insecurity, and gender inequality. Often the reason for the preservation of this situation is the low price of goods, which is set by the purchasing  companies  that  govern  the  GVC.  International  organizations  and  the  media systematically  attract  public  attention  to  this  problem,  which  has  led  to  the  establishment  of control  over  working  conditions  by  the  parent  companies  of  the  GVC.  However,  in  many industries, the workers’ situation is still unsatisfactory, which indicates that the measures taken in this direction are insufficient. According to the author, significant improvement of working conditions  is difficult without the  participation of industry and  inter-industry trade unions  of employees.

scholarly journals Economic upgrading in global value chains

2020 ◽  
Vol 19 ◽  
pp. e020002
Author(s):  
Marília Bassetti Marcato ◽  
Carolina Troncoso Baltar
Keyword(s):  
Value Added ◽  
Global Value Chains ◽  
Value Chains ◽  
Economic Perspective ◽  
Vast Literature ◽  
Economic Upgrading ◽  
Theoretical Apparatus ◽  
Positive Spillovers ◽  
Social Upgrading

This paper has critically documented a vast literature addressing the multi-layered outcomes associated with participating in global value chains (GVCs). In particular, this paper reviews and synthesizes the definitions and quantitative measures of one particular dimension of the GVC analysis that is two-fold: the economic and social upgrading. More specifically, we discuss the economic perspective of upgrading, which is usually associated with “moving into higher value-added stages”, and it is commonly assumed to be followed by positive spillovers regarding technology and productivity. This paper emphasizes the important diversity of definitions and measures within the GVC literature, considering it as a reflection, to a certain extent, of the absence of a systematic theoretical apparatus in the GVC literature. The paper concludes with some considerations on the role of policymakers in promoting social upgrading as an important topic in the GVC research agenda.

Challenges of achieving social upgrading in Bangladesh’s apparel industry

2018 ◽  
Vol 15 (2) ◽  
pp. 77-94 ◽  
Author(s):  
Mohammad Tarikul Islam ◽  
Christina Stringer
Keyword(s):  
Design Methodology ◽  
Apparel Industry ◽  
Value Chains ◽  
Future Research ◽  
Structured Interviews ◽  
Content Type ◽  
Lower Tier ◽  
Economic Upgrading ◽  
System Operating ◽  
Social Upgrading

Purpose Despite substantial economic upgrading, Bangladesh’s apparel industry remains confronted by claims of precarious working conditions. This paper aims to understand the challenges of achieving social upgrading and whether benefits of economic upgrading can transfer to workers and their dependents through social upgrading. Design/methodology/approach Semi-structured interviews were undertaken with 90 participants from six apparel firms in Bangladesh. The interviews were conducted following the Rana Plaza disaster. Findings The results suggest that social upgrading has not occurred to the same extent as economic upgrading. Social upgrading has been compromised in part, by the tiered factory system operating and a lack of governance within the lower tier firms. Research limitations/implications Single country and one industry constitute the main limitations of this research. Future research could include multiple countries and industries to allow for greater generalization of findings. Originality/value The paper provides new insights on how social upgrading might be compromised within the global value chains context and its impact on developing country supplier firms, workers and their families.

scholarly journals State policies and upgrading in global value chains: A systematic literature review

2021 ◽  
Author(s):  
Valentina De Marchi ◽  
Matthew Alford
Keyword(s):  
Public Procurement ◽  
Global Value Chains ◽  
State Policies ◽  
Theory And Practice ◽  
Value Chains ◽  
Value Capture ◽  
State Policymaking ◽  
Environmental Goals ◽  
The One ◽  
Economic Upgrading

AbstractThis paper examines the role of state policymaking in a context of global value chains (GVCs). While the literature acknowledges that states matter in GVCs, there is little understanding of how they matter from a policy perspective. We address this tension between theory and practice by first delineating the state’s facilitator, regulator, producer and buyer roles. We then explore the extent to which corresponding state policies enable or constrain the following policy objectives: GVC participation; value capture; and social and environmental upgrading. We do so via a systematic review of academic GVC literature, combined with analysis of seminal policy publications by International Organizations. Our findings indicate that state policymakers leverage facilitative strategies to achieve GVC participation and enhanced value capture; with regulatory and public procurement mechanisms adopted to address social and environmental goals. Mixed results also emerged, highlighting tensions between policies geared towards economic upgrading on the one hand, and social and environmental upgrading on the other. Finally, we suggest that effective state policies require a multi-scalar appreciation of GVC dynamics, working with multiple and sometimes competing stakeholders to achieve their developmental objectives.

Global Value Chains and Industrial Relations in the Global South: Social Upgrading Paths in Different Industries

2021 ◽  
Vol 24 (1) ◽  
pp. 214-236
Author(s):  
Christina Teipen ◽  
Fabian Mehl
Keyword(s):  
Value Chain ◽  
Industrial Relations ◽  
Global Value Chains ◽  
Value Chains ◽  
Value Chain Analysis ◽  
Theoretical Approaches ◽  
Chain Analysis ◽  
Governance Modes ◽  
Social Upgrading

Abstract The article compares social upgrading trends in four global value chains (apparel, automobiles, electronics and it services) and six developing and emerging economies (Bangladesh, Brazil, China, India, South Africa and Vietnam). It applies a framework, which combines analyses of industry-specific governance modes with recent theoretical approaches from the field of industrial relations. The empirical results show that prospects for social upgrading within similar segments of a particular value chain considerably depend on the national context. The article thus highlights the importance of integrating the role of national institutions into global value chain analysis in order to better explain variegated upgrading dynamics across different countries and industries.

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