Global Value Chains and Technological Capabilities: A Framework to Study Industrial Innovation in Developing Countries
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This paper presents a critical review of the Global Value Chain literature in light of the “Technological Capabilities” approach to innovation and learning in LDCs. It intends to contribute to the GVC approach by setting out an original research agenda for studying their impact on upgrading technological capability building. This form of industrial organization may be particularly beneficial for firms located in LDCs, which are bound to source technology internationally. However, the issues of learning, technological efforts and investments to create and improve technological capabilities at the firm-level remain largely uncovered by this strand of literature. We argue that explicitly addressing these issues within the global value chains literature by using the concepts developed by the technological capabilities literature may importantly contribute to explain developing countries’ firms performance, and why and how they benefit in different degrees from participating in global value chains.