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What are the implications for global value chains when the market shifts from the north to the south?

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  • Raphael Kaplinsky
  • Masuma Farooki

Abstract

This paper charts the evolution of the financial and economic crisis in the global economy and argues that the likely outcome will be sustained growth in the two very large Asian driver economies of China and India and stagnation in the historically dominant northern economies. Given the nature of demand in low income southern economies, it is likely to be reflected in sustained demand for commodities. Based on an analysis of the interaction between the nature of market demand and production processes, this paper argues that the transition in markets from high-income northern to low-income southern consumers will have implications for producers in commodity value chains. In particular it will lead to the diminished importance of standards (often a conduit for capability-growth) and to a reduction in the degree of value added to commodities in exporting economies.

Suggested Citation

  • Raphael Kaplinsky & Masuma Farooki, 2011. "What are the implications for global value chains when the market shifts from the north to the south?," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 4(1/2/3), pages 13-38.
    • Handle: RePEc:ids:ijtlid:v:4:y:2011:i:1/2/3:p:13-38
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    Citations

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    Cited by:

    1. Andrea Szalavetz, 2016. "Post‐crisis developments in global value chains - example of foreign investors’ Hungarian subsidiaries," IWE Working Papers 219, Institute for World Economics - Centre for Economic and Regional Studies.
    2. Lema, Rasmus & Berger, Axel & Schmitz, Hubert, 2012. "China’s impact on the global wind power industry," IDOS Discussion Papers 16/2012, German Institute of Development and Sustainability (IDOS).
    3. Andrés Rodríguez‐Pose & Daniel Hardy, 2021. "Reversal of economic fortunes: Institutions and the changing ascendancy of Barcelona and Madrid as economic hubs," Growth and Change, Wiley Blackwell, vol. 52(1), pages 48-70, March.
    4. Loe Franssen, 2020. "Capturing Value in South–South and South–North Value Chains: Evidence from East Africa," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 32(4), pages 939-975, September.
    5. Chun Yang & Canfei He, 2017. "Transformation of China's ‘World Factory’: Production Relocation and Export Evolution of the Electronics Firms," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 108(5), pages 571-591, October.
    6. Pipkin, Seth & Fuentes, Alberto, 2017. "Spurred to Upgrade: A Review of Triggers and Consequences of Industrial Upgrading in the Global Value Chain Literature," World Development, Elsevier, vol. 98(C), pages 536-554.
    7. Henry Wai-chung Yeung & Neil M. Coe, 2015. "Toward a Dynamic Theory of Global Production Networks," Economic Geography, Clark University, vol. 91(1), pages 29-58, January.
    8. Stefan Pahl & Marcel P Timmer & Reitze Gouma & Pieter J Woltjer, 2022. "Jobs and Productivity Growth in Global Value Chains: New Evidence for Twenty-five Low- and Middle-Income Countries," The World Bank Economic Review, World Bank, vol. 36(3), pages 670-686.
    9. Wilman, Elizabeth A., 2019. "Market Redirection Leakage in the Palm Oil Market," Ecological Economics, Elsevier, vol. 159(C), pages 226-234.

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