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Commodity Chains, Unequal Exchange and Uneven Development


  • Cem Somel

    () (Department of Economics, METU)


Research shows an uneven partition of value added along commodity chains between transnational firms and producers in developing countries. This paper briefly discusses how such a distribution occurs and how it leads to unequal exchange in trade. A North-South trade model reveals the uneven development consequences of this exchange. The terms of trade between North and South help maintain a gap in capital accumulation between the two regions. The model reveals that capital flows covering the trade deficit of the South with the North may help stimulate the unrequited transfer of real resources from South to North.

Suggested Citation

  • Cem Somel, 2004. "Commodity Chains, Unequal Exchange and Uneven Development," ERC Working Papers 0411, ERC - Economic Research Center, Middle East Technical University, revised Sep 2004.
  • Handle: RePEc:met:wpaper:0411

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    References listed on IDEAS

    1. Dutt, Amitava Krishna, 1992. "The NICs, global accumulation and uneven development: implications of a simple three- region model," World Development, Elsevier, vol. 20(8), pages 1159-1171, August.
    2. Prema-Chandra Athukorala, 2000. "Manufactured exports and terms of trade of developing countries: Evidence from Sri Lanka," Journal of Development Studies, Taylor & Francis Journals, vol. 36(5), pages 89-104.
    3. Kenney, Martin & Florida, Richard, 1994. "Japanese maquiladoras: Production organization and global commodity chains," World Development, Elsevier, vol. 22(1), pages 27-44, January.
    4. Robert C. Feenstra, 1998. "Integration of Trade and Disintegration of Production in the Global Economy," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 31-50, Fall.
    5. Cem Somel, 2003. "Estimating the surplus in the periphery: an application to Turkey," Cambridge Journal of Economics, Oxford University Press, vol. 27(6), pages 919-933, November.
    6. Wood, Adrian, 1995. "North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World," OUP Catalogue, Oxford University Press, number 9780198290155, June.
    7. H. Schmitz & P. Knorringa, 2000. "Learning from Global Buyers," Journal of Development Studies, Taylor & Francis Journals, vol. 37(2), pages 177-205.
    8. Gibbon, Peter, 2001. "Upgrading Primary Production: A Global Commodity Chain Approach," World Development, Elsevier, vol. 29(2), pages 345-363, February.
    9. R. Kaplinsky, 2000. "Globalisation and Unequalisation: What Can Be Learned from Value Chain Analysis?," Journal of Development Studies, Taylor & Francis Journals, vol. 37(2), pages 117-146.
    10. Kaplan, David & Kaplinsky, Raphael, 1999. "Trade and Industrial Policy on an Uneven Playing Field: The Case of the Deciduous Fruit Canning Industry in South Africa," World Development, Elsevier, vol. 27(10), pages 1787-1801, October.
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    More about this item


    Unequal exchange; development; commodity chains;

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F2 - International Economics - - International Factor Movements and International Business
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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