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Local embeddedness and economic and social upgrading in Madagascar’s export apparel industry

Listed author(s):
  • Cornelia Staritz
  • Mike Morris

Abstract Over the past decade, several Sub-Saharan African (SSA) countries have developed or expanded export-oriented apparel industries in the context of the Multi-Fibre Arrangement (MFA) quotas and preferential market access, most importantly under the African Growth and Opportunity Act (AGOA). Madagascar is different to the other main SSA low-income country (LIC) apparel exporters – Kenya, Lesotho and Swaziland – given its more diverse end markets and ownership structures and the political instability that led to the loss of AGOA status at the end of 2009. This paper assesses the development of Madagascar’s export-oriented apparel industry and economic and social upgrading dynamics in particular in the context of the AGOA loss. It identifies four types of firms and value chains that differ with regard to ownership patterns, end markets and, most importantly, ‘local embeddedness’, with important implications for both economic upgrading dynamics and possibilities and the sustainability of the industry. The paper concludes that, despite the contraction in the export-oriented apparel industry post-AGOA, Madagascar is still a more successful apparel producer in terms of economic upgrading than the other main apparel-exporting LICs in SSA. The key to this trajectory lies in the differentiation of global value chain (GVC) relationships, local embeddedness and export diversification.

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File URL: http://www.capturingthegains.org/pdf/ctg-wp-2013-21.pdf
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Paper provided by BWPI, The University of Manchester in its series Brooks World Poverty Institute Working Paper Series with number ctg-2013-21.

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Date of creation: 2013
Handle: RePEc:bwp:bwppap:ctg-2013-21
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  1. Judith Fessehaie & Mike Morris, 2013. "Value Chain Dynamics of Chinese Copper Mining in Zambia: Enclave or Linkage Development?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 25(4), pages 537-556, September.
  2. Mike Morris & Cornelia Staritz & Justin Barnes, 2011. "Value chain dynamics, local embeddedness, and upgrading in the clothing sectors of Lesotho and Swaziland," International Journal of Technological Learning, Innovation and Development, Inderscience Enterprises Ltd, vol. 4(1/2/3), pages 96-119.
  3. Staritz, Cornelia & Morris, Mike, 2012. "Local embeddedness, upgrading, and skill development: Global value chains and foreign direct investment in Lesotho's apparel industry," Working Papers 32, Österreichische Forschungsstiftung für Internationale Entwicklung (ÖFSE) / Austrian Foundation for Development Research.
  4. Palpacuer, Florence & Gibbon, Peter & Thomsen, Lotte, 2005. "New Challenges for Developing Country Suppliers in Global Clothing Chains: A Comparative European Perspective," World Development, Elsevier, vol. 33(3), pages 409-430, March.
  5. Cornelia Staritz, 2011. "Making the Cut? Low-Income Countries and the Global Clothing Value Chain in a Post-Quota and Post-Crisis World," World Bank Publications, The World Bank, number 2547, April.
  6. C. Dolan & J. Humphrey, 2000. "Governance and Trade in Fresh Vegetables: The Impact of UK Supermarkets on the African Horticulture Industry," Journal of Development Studies, Taylor & Francis Journals, vol. 37(2), pages 147-176.
  7. Olivier Cattaneo & Gary Gereffi & Cornelia Staritz, 2010. "Global Value Chains in a Postcrisis World : A Development Perspective," World Bank Publications, The World Bank, number 2509, April.
  8. Jean-Pierre Cling & Mireille Razafindrakoto & François Roubaud, 2007. "Export Processing Zones in Madagascar: the impact of the dismantling of clothing quotas on employment and labour standards," Working Papers DT/2007/06, DIAL (Développement, Institutions et Mondialisation).
  9. Dunning, John H., 2000. "The eclectic paradigm as an envelope for economic and business theories of MNE activity," International Business Review, Elsevier, vol. 9(2), pages 163-190, April.
  10. Phelps, Nicholas A. & Stillwell, John C.H. & Wanjiru, Roseline, 2009. "Broken Chain? AGOA and Foreign Direct Investment in the Kenyan Clothing Industry," World Development, Elsevier, vol. 37(2), pages 314-325, February.
  11. Gladys Lopez-Acevedo & Raymond Robertson, 2012. "Sewing Success? Employment, Wages, and Poverty following the End of the Multi-Fibre Arrangement," World Bank Publications, The World Bank, number 13137, April.
  12. Morris, Mike & Kaplinsky, Raphael & Kaplan, David, 2012. "“One thing leads to another”—Commodities, linkages and industrial development," Resources Policy, Elsevier, vol. 37(4), pages 408-416.
  13. John Humphrey & Hubert Schmitz, 2002. "How does insertion in global value chains affect upgrading in industrial clusters?," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 1017-1027.
  14. Epstein, Gerald. & Heintz, James. & Ndikumana, Léonce. & Chang, Grace., 2010. "Employment, poverty and economic development in Madagascar : a macroeconomic framework," ILO Working Papers 994554463402676, International Labour Organization.
  15. repec:ilo:ilowps:455446 is not listed on IDEAS
  16. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, vol. 48(1), pages 37-70, June.
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