Forms of Governance, Learning Mechanisms and Upgrading Strategies in the Tobacco Cluster in Rio Pardo Valley, Brazil

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This paper analyses how the production and innovation activities in the tobacco cluster in Rio Pardo Valley are organised through a complex network linking local producers to MNCs and global markets. The relationship between global chain governance and local upgrading strategies has received growing attention in the recent literature. The paper aims to contribute to this debate by seeking answers to three questions: first, how is the cluster's organisation at the local level influenced by the global tobacco chain; second, how are the innovation paths and learning mechanisms in the cluster affected by the global chain governance; third, what are the long-term prospects of this cluster considering the power asymmetries associated with the cluster's production and knowledge systems. Although the cluster has a long tradition in production, processing and trade of tobacco and has given rise to a number of collective institutions, it has come to be governed by subsidiaries of MNCs which run the global tobacco chain. Even though local enterprises play a critical role in the global tobacco chain as raw material suppliers and service providers, most of the innovations adopted at the growing stage are developed through knowledge through knowledge systems in which producers are other local actors play only a minor role.