This article explores the power of the global value chain approach in explaining the growth of production capabilities and the distribution of gains. It suggests that the upgrading opportunities of local enterprises are structured by the relationships in global value chains.
This is shown clearly for the case of the garment and footwear industry, where advances have been rapid in product and process upgrading but more limited in functional upgrading. With regard to the distribution of gains, the global value chain approach also provides clear hypotheses but the empirical evidence remains weak.
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