Participation and upgrading in global value chains

Entering regional and global value chains and upgrading within them, in terms of specialization, market share or value added, can be a powerful mechanism for promoting structural change, reducing structural heterogeneity among companies of different sizes, increasing economic productivity and generating productive employment opportunities. Over time, development policy in many emerging economies has shifted its focus from import substitution and export promotion towards finding a suitable entry point in vertically integrated global production chains or networks and subsequently upgrading within them. A priority for these countries is to attract foreign direct investment (FDI) from multinational corporations and promote the participation of domestic firms in these international production chains.

Related Subject(s): Economic and Social Development