Discussion Paper Details

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Title: Firm-Level Upgrading in Developing Countries

Author(s): Eric A Verhoogen

Publication Date: November 2021


Programme Area(s): Development Economics, Industrial Organization and International Trade and Regional Economics

Abstract: In principle, firms in developing countries benefit from the fact that advanced technologies and products have already been developed in industrialized countries and can simply be adopted, a process often referred to as industrial upgrading. But for many firms this advantage remains elusive. What is getting in the way? This paper reviews recent firm-level empirical research on the determinants of upgrading in developing countries. The first part focuses on how to define and measure various dimensions of upgrading --- learning, quality upgrading, technology adoption, and product innovation. The second part takes stock of recent micro-empirical evidence on the drivers of upgrading, classifying them as output-side drivers, input-side drivers, or drivers of know-how. The review concludes with some thoughts about promising directions for research in the area.

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Bibliographic Reference

Verhoogen, E. 2021. 'Firm-Level Upgrading in Developing Countries'. London, Centre for Economic Policy Research.