Global Value Chain

Innovation Drivers, Value Chains and the Geography of Multinational Corporations in Europe

Innovation Drivers, Value Chains and the Geography of Multinational Corporations in Europe

Journal of Economic Geography, forthcoming

The article is co-authored with Riccardo Crescenzi and Carlo Pietrobelli.

It investigates the geography of multinational companies’ investments in the EU regions. The ‘traditional’ sources of location advantages (i.e. agglomeration economies, market access and labour market conditions) are considered together with innovation and socio-institutional drivers of investments, captured by means of regional “social filter” conditions. This makes it possible to empirically assess the different role played by such advantages in the location decision of investments at different stages of the value chain and disentangle the differential role of national vs. regional factors. The empirical analysis covers the EU-25 regions and suggests that regional socio- economic conditions are crucially important for the location decisions of investments in the most sophisticated knowledge-intensive stages of the value chain.

More

The resilience of clusters in the context of globalisation: The basque wind value chain

European Planning Studies, 21(7): 989-1006

The article is co-authored with A. Elola and M.D. Parrilli.

In this paper we study how globalization impacts on the structure and governance patterns of value chains and on the resilience of local clusters. We study the value chains related to two Basque (Spain) companies in the wind energy industry, Iberdrola and Gamesa, and the local cluster to which they belong. We find that firms within the cluster have different types of relationships with lead companies depending on their competences and the complexity of their products. As a consequence, firms also present different potential for growth and/or resilience: some have the capacity to internationalize their operations and/or shift to the offshore wind market, others are vulnerable to competition from providers in the emerging countries. Against this context, we discuss how the cluster responds to these challenges and the role of policy.

More

Análisis de la cadena de valor de la industria eólica vasca: oportunidades y ámbitos de mejora

Orkestra, Universidad de Deusto, San Sebastian.

With M.D. Parrilli, E. Álvarez Pelegry, A. Elola, U. Lorenz

This paper addresses two pressing issues: first, it highlights the need to explore an industry with a broad global outlook in a world that increasingly requires alternative energies to foster local and global development in a sustained and, above all, sustainable manner; second, it seeks to identify the overall competitive positioning of agents and firms of the Basque power industry in the global value chains of the wind energy sector that seem to form a critical mass that could be heavily exploited with a view to economic and social development for the region and the country.

Download the pdf, WP Orkestra 2012

Global Value Chains and Technological Capabilities: A Framework to Study Industrial Innovation in Developing Countries

Oxford Development Studies, 36(1): 39-58

The paper is co-authored with Andrea Morrison and Carlo Pietrobelli.

It presents a critical review of the Global Value Chain literature in light of the “Technological Capabilities” approach to innovation in LDCs. Participation in GVC is beneficial for firms in LDCs, which are bound to source technology internationally. However, the issues of learning and technological efforts at the firm-level remain largely uncovered by the GVC literature.
We propose a shift in the empirical and theoretical agenda, arguing that research should integrate the analysis of the endogenous process of technological capability development, of the specific firm-level efforts and of the mechanisms allowing knowledge to flow within and between different global value chains into the GVC literature.

Upgrading to Compete: SMEs, Clusters and Value Chains in Latin America

Upgrading to Compete: SMEs, Clusters and Value Chains in Latin America

Published by Harvard University Press

Edited with Carlo Pietrobelli

This books investigates clusters and value chains in Latin America. Globalization imposes new conditions and rules for competitiveness in international markets. It poses the imperative to link up with other actors, both at the local and at the global level, and find new ways to interact and learn from the relationship. Can local markets and clusters represent a powerful alternative to global markets? Do transnational corporations and global buyers play a role and enhance or undermine local firms’ upgrading and learning? What opportunities do clustering and global value chains offer to SMEs in global markets?
Upgrading to Compete shows that both the local and the global dimensions matter at once. Clustering and collaborating with other local firms offers substantial advantages, while also participating in global value chains and interacting with foreign buyers and companies may enhance local firms’ capabilities and access to distant markets. However, what remarkably matters is the form of governance of value chains and clusters that importantly affects the upgrading process of local SMEs.
The book illustrates this with original empirical evidence from several clusters in Latin America. New case studies from Brazil, Chile, Mexico and Nicaragua are supplemented by desk studies on other experiences in the region.

«At a time when there is growing interest in Latin America on active production sector strategies and on the role of SMEs, Pietrobelli and Rabellotti make in this book an essential contribution. “Upgrading to Compete” is full of quality information and insights. I look forward for the introduction of many of the ideas and recommendations of this book into policy action.»
Jose Antonio Ocampo
Under-Secretary-General of the United Nations for Economic and Social Affairs

«This book offers a new way of thinking into fundamental aspects of industrial organization and international trade and exploits original case studies to develop new ideas and stylized facts.»
Michael Piore
David W. Skinner Professor of Political Economy, Massachusetts Institute of Technology

The book was reviewed in Foreign Affairs

You can buy the book here

Upgrading in global value chains: lessons from Latin America clusters

World Development, 33(4): 549-73

The article is in collaboration with Elisa Giuliani and Carlo Pietrobelli.

It has been shown that clustering helps local enterprises in industrial districts overcome growth constraints and compete in distant markets in advanced and less developed countries. Nevertheless, recent contributions have stressed that more attention needs to be paid to external linkages and to the role played by global buyers to foster upgrading at cluster levels. In this study, we contribute to this debate focusing on the analysis of the relationships existing between clustering, global value chains, upgrading and sectoral patterns of innovation in Latin America. We find that sectoral specificities matter and influence the mode and the extent of upgrading in clusters integrated in global value chains.
Download the pdf, JA World Development 2005-04