IDEAS home Printed from https://ideas.repec.org/p/tik/inowpp/20171012.html
   My bibliography  Save this paper

Global value chains, national innovation systems and economic development

Author

Listed:
  • Jan Fagerberg

    (Centre for Technology, Innovation and Culture (TIK), University of Oslo & Department of Business and Management, Aalborg University)

  • Bengt-Åke Lundvall

    (IKE, Department of Business and Management, Aalborg University)

  • Martin Srholec

    (Center for Economic Research and Graduate Education-Economics Institute (CERGE-EI), Charles University, Prague and Centre for Innovation, Research and Competence in the Learning Economy (CIRCLE), Lund University)

Abstract

This paper deals with the role of global value chains (GVC) and other aspects of “openness” for economic development. To analyse the issue a comprehensive framework that allows for the inclusion of a range of relevant factors including not only different form of openness, such as GVC participation, but also technological and social capabilities, is developed. The analysis is based on evidence from 125 countries, including many developing nations, over the period 1997-2013. It is shown that economic growth reflects the strength of the national innovation system and that GVC participation is not the potent driver of economic growth that tends to be assumed.

Suggested Citation

  • Jan Fagerberg & Bengt-Åke Lundvall & Martin Srholec, 2017. "Global value chains, national innovation systems and economic development," Working Papers on Innovation Studies 20171012, Centre for Technology, Innovation and Culture, University of Oslo.
    • Handle: RePEc:tik:inowpp:20171012
    as

    Download full text from publisher

    File URL: http://www.sv.uio.no/tik/InnoWP/tik_working_paper_20171012.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Davide Del Prete & Giorgia Giovannetti & Enrico Marvasi, 2017. "Global value chains participation and productivity gains for North African firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 153(4), pages 675-701, November.
    2. Robert Koopman & Zhi Wang & Shang-Jin Wei, 2014. "Tracing Value-Added and Double Counting in Gross Exports," American Economic Review, American Economic Association, vol. 104(2), pages 459-494, February.
    3. Holger Görg & David Greenaway, 2016. "Much Ado about Nothing? Do Domestic Firms Really Benefit from Foreign Direct Investment?," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 9, pages 163-189, World Scientific Publishing Co. Pte. Ltd..
    4. Schmitz, Hubert, 1995. "Small shoemakers and fordist giants: Tale of a supercluster," World Development, Elsevier, vol. 23(1), pages 9-28, January.
    5. Timothy J. Sturgeon, 2002. "Modular production networks: a new American model of industrial organization," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 11(3), pages 451-496, June.
    6. Xavier Cirera & William F. Maloney, 2017. "The Innovation Paradox," World Bank Publications - Books, The World Bank Group, number 28341, December.
    7. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    8. Jan Fagerberg & Martin Srholec, 2017. "Capabilities, economic development, sustainability," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(3), pages 905-926.
    9. Borensztein, E. & De Gregorio, J. & Lee, J-W., 1998. "How does foreign direct investment affect economic growth?1," Journal of International Economics, Elsevier, vol. 45(1), pages 115-135, June.
    10. Rodrik, Dani, 1994. "King Kong Meets Godzilla: The World Bank and The East Asian Miracle," CEPR Discussion Papers 944, C.E.P.R. Discussion Papers.
    11. Jan Fagerberg & Martin Srholec, 2009. "Innovation Systems, Technology and Development: Unpacking the Relationships," Chapters, in: Bengt-Åke Lundvall & K. J. Joseph & Cristina Chaminade & Jan Vang (ed.), Handbook of Innovation Systems and Developing Countries, chapter 4, Edward Elgar Publishing.
    12. Lall, Sanjaya, 1992. "Technological capabilities and industrialization," World Development, Elsevier, vol. 20(2), pages 165-186, February.
    13. Rajneesh Narula & John Dunning, 2010. "Multinational Enterprises, Development and Globalization: Some Clarifications and a Research Agenda," Oxford Development Studies, Taylor & Francis Journals, vol. 38(3), pages 263-287.
    14. Narula, Rajneesh, 2018. "Multinational firms and the extractive sectors in the 21st century: Can they drive development?," Journal of World Business, Elsevier, vol. 53(1), pages 85-91.
    15. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 407-443.
    16. Paola Criscuolo & Rajneesh Narula, 2008. "A novel approach to national technological accumulation and absorptive capacity: aggregating Cohen and Levinthal," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(1), pages 56-73.
    17. Davide Castellani & Antonello Zanfei, 2006. "Multinational Firms, Innovation and Productivity," Books, Edward Elgar Publishing, number 3709.
    18. Bengt-Åke Lundvall & K. J. Joseph & Cristina Chaminade & Jan Vang (ed.), 2009. "Handbook of Innovation Systems and Developing Countries," Books, Edward Elgar Publishing, number 12943.
    19. Fu, Xiaolan & Pietrobelli, Carlo & Soete, Luc, 2011. "The Role of Foreign Technology and Indigenous Innovation in the Emerging Economies: Technological Change and Catching-up," World Development, Elsevier, vol. 39(7), pages 1204-1212, July.
    20. Castellacci, Fulvio & Natera, Jose Miguel, 2011. "A new panel dataset for cross-country analyses of national systems, growth and development (CANA)," MPRA Paper 28376, University Library of Munich, Germany.
    21. Carlo Pietrobelli & Cornelia Staritz, 2018. "Upgrading, Interactive Learning, and Innovation Systems in Value Chain Interventions," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 557-574, July.
    22. World Bank, 2015. "World Development Indicators 2015," World Bank Publications - Books, The World Bank Group, number 21634, December.
    23. Bronwyn H. Hall & Nathan Rosenberg (ed.), 2010. "Handbook of the Economics of Innovation," Handbook of the Economics of Innovation, Elsevier, edition 1, volume 1, number 1.
    24. John Luke Gallup & Jeffrey D. Sachs & Andrew Mellinger, 1999. "Geography and Economic Development," CID Working Papers 1, Center for International Development at Harvard University.
    25. Keller, Wolfgang, 2010. "International Trade, Foreign Direct Investment, and Technology Spillovers," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 793-829, Elsevier.
    26. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(2), pages 385-406, June.
    27. Gary Gereffi, 2014. "Global value chains in a post-Washington Consensus world," Review of International Political Economy, Taylor & Francis Journals, vol. 21(1), pages 9-37, February.
    28. 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.
    29. Giuliani, Elisa & Pietrobelli, Carlo & Rabellotti, Roberta, 2005. "Upgrading in Global Value Chains: Lessons from Latin American Clusters," World Development, Elsevier, vol. 33(4), pages 549-573, April.
    30. 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.
    31. World Bank, 2016. "World Development Indicators 2016," World Bank Publications - Books, The World Bank Group, number 23969, December.
    32. Gallup, John L. & Sachs, Jeffrey D. & Mellinger, Andrew, "undated". "Geography and Economic Development," Instructional Stata datasets for econometrics geodata, Boston College Department of Economics.
    33. Lucia Tajoli & Giulia Felice, 2018. "Global Value Chains Participation and Knowledge Spillovers in Developed and Developing Countries: An Empirical Investigation," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 505-532, July.
    34. Lee,Keun, 2013. "Schumpeterian Analysis of Economic Catch-up," Cambridge Books, Cambridge University Press, number 9781107042681.
    35. Marcel P. Timmer & Erik Dietzenbacher & Bart Los & Robert Stehrer & Gaaitzen J. Vries, 2015. "An Illustrated User Guide to the World Input–Output Database: the Case of Global Automotive Production," Review of International Economics, Wiley Blackwell, vol. 23(3), pages 575-605, August.
    36. Bengt-åke Lundvall & Jan Vang & K.J. Joseph, 2009. "Innovation System Research and Developing Countries," Chapters, in: Bengt-Åke Lundvall & K. J. Joseph & Cristina Chaminade & Jan Vang (ed.), Handbook of Innovation Systems and Developing Countries, chapter 1, Edward Elgar Publishing.
    37. Nomaler, Ö. & Verspagen, B., 2014. "Analysing global value chains using input-output economics: Proceed with care," MERIT Working Papers 2014-070, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    38. Del Prete, Davide & Giovannetti, Giorgia & Marvasi, Enrico, 2018. "Global value chains: New evidence for North Africa," International Economics, Elsevier, vol. 153(C), pages 42-54.
    39. Gallup, John & Sachs, Jeffrey, 1999. "Geography and Economic Development," Harvard Institute for International Development (HIID) Papers 294434, Harvard University, Kennedy School of Government.
    40. Jyrki Ali-Yrkkö & Petri Rouvinen & Timo Seppälä & Pekka Ylä-Anttila, 2011. "Who Captures Value in Global Supply Chains? Case Nokia N95 Smartphone," Journal of Industry, Competition and Trade, Springer, vol. 11(3), pages 263-278, September.
    41. Moses Abramovitz, 1956. "Resource and Output Trends in the United States since 1870," NBER Books, National Bureau of Economic Research, Inc, number abra56-1, March.
    42. Gallup, J.L. & Sachs, J.D. & Mullinger, A., 1999. "Geography and Economic Development," Papers 1, Chicago - Graduate School of Business.
    43. Fagerberg, Jan & Srholec, Martin, 2008. "National innovation systems, capabilities and economic development," Research Policy, Elsevier, vol. 37(9), pages 1417-1435, October.
    44. Marcel P. Timmer & Abdul Azeez Erumban & Bart Los & Robert Stehrer & Gaaitzen J. de Vries, 2014. "Slicing Up Global Value Chains," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 99-118, Spring.
    45. Cornwall, John, 1976. "Diffusion, Convergence and Kaldor's Laws," Economic Journal, Royal Economic Society, vol. 86(342), pages 307-314, June.
    46. Wagner, Caroline S. & Leydesdorff, Loet, 2005. "Network structure, self-organization, and the growth of international collaboration in science," Research Policy, Elsevier, vol. 34(10), pages 1608-1618, December.
    47. Moses Abramovitz, 1956. "Resource and Output Trends in the United States since 1870," NBER Chapters, in: Resource and Output Trends in the United States since 1870, pages 1-23, National Bureau of Economic Research, Inc.
    48. Jan Fagerberg & Manuel Godinho, 2003. "Innovation and catching-up," Working Papers 24, Centre for Technology, Innovation and Culture, University of Oslo.
    49. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    50. Foster-McGregor, Neil & Kaulich, Florian & Stehrer, Robert, 2015. "Global Value Chains in Africa," MERIT Working Papers 2015-024, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    51. Schmitz, Hubert, 1999. "Global Competition and Local Cooperation: Success and Failure in the Sinos Valley, Brazil," World Development, Elsevier, vol. 27(9), pages 1627-1650, September.
    52. Matija Rojec & Mark Knell, 2018. "Why Is There A Lack Of Evidence On Knowledge Spillovers From Foreign Direct Investment?," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 579-612, July.
    53. Victor Kummritz, 2015. "Global Value Chains: Benefiting the Domestic Economy?," IHEID Working Papers 02-2015, Economics Section, The Graduate Institute of International Studies.
    54. Xu, Bin, 2000. "Multinational enterprises, technology diffusion, and host country productivity growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 477-493, August.
    55. Dieter Ernst & Linsu Kim, 2002. "Global Production Networks, Information Technology and Knowledge Diffusion," Industry and Innovation, Taylor & Francis Journals, vol. 9(3), pages 147-153.
    56. Robert Koopman & William Powers & Zhi Wang & Shang-Jin Wei, 2010. "Give Credit Where Credit Is Due: Tracing Value Added in Global Production Chains," NBER Working Papers 16426, National Bureau of Economic Research, Inc.
    57. Ernst, Dieter & Kim, Linsu, 2002. "Global production networks, knowledge diffusion, and local capability formation," Research Policy, Elsevier, vol. 31(8-9), pages 1417-1429, December.
    58. 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.
    59. Ponte, Stefano & Ewert, Joachim, 2009. "Which Way is "Up" in Upgrading? Trajectories of Change in the Value Chain for South African Wine," World Development, Elsevier, vol. 37(10), pages 1637-1650, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    2. Fagerberg , Jan & Srholec , Martin, 2015. "Capabilities, Competitiveness, Nations," Papers in Innovation Studies 2015/2, Lund University, CIRCLE - Centre for Innovation Research.
    3. Jan Fagerberg, 2010. "The Changing Global Economic Landscape: The Factors that Matter," Chapters, in: Robert M. Solow & Jean-Philippe Touffut (ed.), The Shape of the Division of Labour, chapter 1, Edward Elgar Publishing.
    4. Jan Fagerberg & Martin Srholec, 2017. "Capabilities, economic development, sustainability," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(3), pages 905-926.
    5. Jan Fagerberg & Martin Srholec, 2005. "Catching up: What are the Critical Factors for success?," Working Papers on Innovation Studies 20050401, Centre for Technology, Innovation and Culture, University of Oslo.
    6. Fagerberg, Jan & Srholec, Martin, 2008. "National innovation systems, capabilities and economic development," Research Policy, Elsevier, vol. 37(9), pages 1417-1435, October.
    7. Padmashree Gehl Sampath & Bertha Vallejo, 2018. "Trade, Global Value Chains and Upgrading: What, When and How?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 481-504, July.
    8. Gries, T. & Grundmann, R. & Palnau, I. & Redlin, M., 2015. "Does technological change drive inclusive industrialization? : A review of major concepts and findings," MERIT Working Papers 2015-044, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. Jan Fagerberg & Martin Srholec, 2017. "Global Dynamics, Capabilities and the Crisis," Economic Complexity and Evolution, in: Andreas Pyka & Uwe Cantner (ed.), Foundations of Economic Change, pages 83-106, Springer.
    10. Dutrénit, Gabriela & Natera, José Miguel & Puchet Anyul, Martín & Vera-Cruz, Alexandre O., 2019. "Development profiles and accumulation of technological capabilities in Latin America," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 396-412.
    11. Delera, Michele & Pietrobelli, Carlo & Calza, Elisa & Lavopa, Alejandro, 2022. "Does value chain participation facilitate the adoption of Industry 4.0 technologies in developing countries?," World Development, Elsevier, vol. 152(C).
    12. Ian W. McLean & Alan M. Taylor, 2001. "Australian Growth: A California Perspective," NBER Working Papers 8408, National Bureau of Economic Research, Inc.
    13. Nenci, Silvia & Fusacchia, Ilaria & Giunta, Anna & Montalbano, Pierluigi & Pietrobelli, Carlo, 2022. "Mapping global value chain participation and positioning in agriculture and food: stylised facts, empirical evidence and critical issues," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 11(2), July.
    14. Owusu, Solomon, 2021. "Powering structural transformation and productivity gains in Africa: The role of global value chains and resource endowments," MERIT Working Papers 2021-022, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    15. Ron Boschma, 2021. "Global Value Chains from an Evolutionary Economic Geography perspective: a research agenda," Papers in Evolutionary Economic Geography (PEEG) 2134, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Nov 2021.
    16. T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2018. "Technology diffusion, international integration and participation in developing economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 15(1), pages 215-253, January.
    17. Pleticha, Petr, 2021. "Who Benefits from Global Value Chain Participation? Does Functional Specialization Matter?," Structural Change and Economic Dynamics, Elsevier, vol. 58(C), pages 291-299.
    18. Fagerberg, Jan & Srholec, Martin & Knell, Mark, 2007. "The Competitiveness of Nations: Why Some Countries Prosper While Others Fall Behind," World Development, Elsevier, vol. 35(10), pages 1595-1620, October.
    19. Arvanitidis, Paschalis & Petrakos, George & Pavleas, Sotiris, 2007. "Determinants of economic growth: the experts’ view," Papers DYNREG20, Economic and Social Research Institute (ESRI).
    20. Steff De Visscher & Markus Eberhardt & Gerdie Everaert, 2017. "Measuring productivity and absorptive capacity evolution," Discussion Papers 2017-11, University of Nottingham, GEP.

    More about this item

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tik:inowpp:20171012. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: H&kon Normann (email available below). General contact details of provider: https://edirc.repec.org/data/tkuiono.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.