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Global Value Chains, National Innovation Systems and Economic Development

  • Jan Fagerberg
  • Bengt-Åke Lundvall
  • Martin SrholecEmail author
Special Issue Article

Abstract

The purpose of this paper is to examine the hypothesis that increased participation in global value chains (GVCs), such as assembly of imported parts for exports, leads to higher economic growth. The focus is particularly on the extent to which this holds for low-income countries, and the role that capability-building, i.e. development of the national innovation system, plays in the possibility of benefitting from GVCs. The analysis is based on evidence from 125 countries over the period 1997–2013. To analyse the issue, a comprehensive framework that allows for inclusion of a range of relevant factors, including GVC participation (measured by the foreign value added embodied in a country’s exports), is applied. The results suggest that countries that increase GVC participation do not grow faster than other countries, when other relevant factors are controlled for. Small countries, and countries with low capabilities, appear to be particularly disadvantaged.

Keywords

global value chains capability national innovation system economic development economic growth 

Le but de cet article est d’examiner l’hypothèse selon laquelle une participation accrue aux chaînes de valeur mondiales (CVM), telle que l’assemblage de parties importées dans le but de les exporter, conduit à une croissance économique plus élevée. L’accent est mis surtout sur la pertinence de cet hypothèse pour les pays en développement. L’analyse est fondée sur des données probantes provenant de 125 pays, dont de nombreux pays à faible revenu, sur la période 1997–2013. Pour analyser la question, un cadre global qui permet d’inclure une série de facteurs pertinents, y compris la valeur ajoutée étrangère dans les exportations d’un pays (importations CVM), est appliqué. Les résultats présentés dans l’article suggèrent que les pays qui augmentent les importations de la chaîne de valeur mondiale ne connaissent pas une croissance plus rapide que d’autres pays, lorsque d’autres facteurs sont contrôlés. Les petits pays, et les pays à faible capacité, semblent particulièrement désavantagés.

JEL Classification

F43 O10 O30 O40 O57 

Notes

Acknowledgements

Financial support from the VINNOVA Core Funding of Centers for Innovation Systems Research project 2010-01370 on “Transformation and Growth in Innovation Systems: Innovation Policy for Global Competitiveness of SMEs and R&I Milieus” and the Czech Science Foundation (GAČR) project 17-09628S on “Innovation activities in global production networks: Evidence from Czech business enterprises” is gratefully acknowledged. Earlier versions of the paper were presented at the 2016 OBEL Symposium on Innovation Systems, Globalization and Development, May 10–12, 2016, Aalborg, Denmark, the 14th Globelics International Conference, October 12–14, 2016, Bandung, Indonesia and the workshop on “Innovation Systems in the era of Global Value Chains”, April 24–25, 2017, Copenhagen, Denmark. We thank participants at these events, especially John Humphrey, Ned Lorenz and Bart Verspagen, and reviewers and editors of the journal for useful comments and suggestions. All usual caveats apply.

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Copyright information

© European Association of Development Research and Training Institutes (EADI) 2018

Authors and Affiliations

  • Jan Fagerberg
    • 1
    • 2
  • Bengt-Åke Lundvall
    • 2
  • Martin Srholec
    • 3
    • 4
    Email author
  1. 1.Center for Technology, Innovation and Culture (TIK)University of OsloOsloNorway
  2. 2.IKE, Department of Business and ManagementAalborg UniversityAalborgDenmark
  3. 3.Center for Economic Research and Graduate Education-Economics Institute (CERGE-EI)a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences111 21 PragueCzechia
  4. 4.Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE)Lund UniversityLundSweden

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