Economic and social upgrading dynamics in global manufacturing value chains: A comparative analysis

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Recent decades have witnessed an increasing integration of developing countries into global value chains (GVCs). This growing participation in global production sharing has raised hopes for economic upgrading within such value chains. However, globalization has intensified international competition, and achieving economic upgrading is not an easy task. Moreover, the social consequences of participating in GVCs are not always positive; however, they have received considerably less attention in the literature. This paper suggests a simple and parsimonious approach to measuring economic and social upgrading (and downgrading) in GVCs. Applying this parsimonious methodology and using quantitative secondary data, we analyze how widespread upgrading has been in four selected manufacturing GVCs: apparel, wood furniture, automotive, and mobile phones. We also investigate to what extent downgrading is part of the reality and undertake a comparative analysis across GVCs, regions and country groups (developing vs. developed countries). We find that the promise of industrial upgrading through participation in GVCs does not materialize for everyone. Indeed, economic upgrading has taken place in just over a quarter of the countries in our sample, among them mainly developing countries. Finally, we examine the relationship between economic performance and social performance in the different GVCs to investigate whether or not economic upgrading is typically associated with social upgrading. While patterns differ across GVCs, we find that economic upgrading is more likely to occur simultaneously with social upgrading than without, and vice versa. Our analysis, thus, suggests that economic upgrading is conducive to, but not sufficient for, social upgrading to occur. Terms of use: Documents in

Governance of Eswatini Apparel Regional Value Chains and the Implications of Covid-19

“…We use the common practice of measuring product quality using unit values (Schott 2004 ; Hallak 2006 ). An increase or decrease in unit values has been used as an indicator of economic upgrading and downgrading, respectively (Bernhardt and Milberg 2012 ; Bernhardt and Pollak 2016 ; Van Assche and Van Biesebroeck 2018 ). This is calculated as the natural log of the transaction’s real value divided by the quantity exported (Pasquali 2021b ).…”

Working Conditions in Global Value Chains: Evidence for European Employees

“…2. Economic upgrading, which fosters innovation and competitiveness, may be defined as 'embarking on a high road to competitiveness through productivity increases and quality improvements' (Bernhardt andPollak, 2016: 1224) while social upgrading refers to 'the process of improvements in the rights and entitlements of workers as social actors, which enhances the quality of their employment' (Barrientos et al, 2011a: 324). 3.…”

“…Selwyn (2013) mentions three main limitations: first, the ILO's concept of social upgrading 6 has limited power and its real impact on companies' behaviour is modest; second, little is said about the processes and mechanisms for social upgrading; and last, the exploitation of labour tends to be downplayed, focusing instead on institutional arrangements between state, capital and labour, which ignores the real reasons for labour inequalities. Wages alone are not any sufficient indicator of social upgrading, and are not any reliable gauge of working conditions in the broader sense either (Bernhardt and Pollak, 2016). A broader view has been taken, among others, by: Lee et al (2016), who consider -in addition to wages -hours, overtime, hiring and contract practices, as well as health and safety conditions; by Kabeer and Mahmud (2004), who associate working conditions with permanent job status, maternity benefits, paid leave, accommodations, medical care, and overtime pay; by Barrientos et al (2016), who define social upgrading by work opportunities, measurable labour standards and enabling rights; by Bair and Gereffi (2001), who focus on safety, exploitation, compliance with local labour laws, and sanitary conditions at the workplace; by Rossi (2013), who considers work environment, overtime, job and social security, as well as enabling rights.…”

“…Participation in GVCs brings economic benefits, but their translation into better working conditions is not automatic or self-evident. Where early studies on GVCs suggested a straightforward relationship between economic and social upgrading 2 (Kabeer and Mahmud, 2004;Nadvi et al, 2004), more recent research holds that this relationship is not fully demonstrated (Bernhardt and Pollak, 2016). On the one hand, cross-border production links may create job opportunities for marginalised workers, making the integration of groups typically discriminated against (e.g.…”

“…Secondly, there are methodological problems. Empirically, the concept of 'social upgrading' has been quantified mostly using country-level data (hence loss of individual, worker-specific dimensions) based exclusively on wages (Bernhardt and Pollak, 2016). This is an oversimplification, as the quality of employment depends not only on wage levels but also on such factors as non-standard payments, working hours and overtime, freedom of association, as well as workplace safety.…”