International trade and the relation between economic and social upgrading

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Does improved export performance result in social upgrading? While most research presumes economic upgrading leads directly to social upgrading in global value chains, this connection has not been analyzed in a systematic fashion. Research on apparel, horticulture, mobile phones and tourism value chains in ten or more developing countries (1990-2009) indicates:

  • Economic upgrading is generally a necessary but insufficient condition for social upgrading.
  • Economic downgrading, and especially social downgrading, is more common than previous research would indicate.
  • Trade policy could play an important role in shaping and connecting economic and social upgrading.