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Firm-Level Upgrading in Developing Countries

Author

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  • Verhoogen, Eric

    (Columbia University)

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.

Suggested Citation

  • Verhoogen, Eric, 2021. "Firm-Level Upgrading in Developing Countries," IZA Discussion Papers 14858, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14858
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    Cited by:

    1. Stephen Ayerst & Loren Brandt & Diego Restuccia, 2023. "Distortions, Producer Dynamics, and Aggregate Productivity: A General Equilibrium Analysis," Working Papers tecipa-748, University of Toronto, Department of Economics.
    2. Kevin Randy Chemo Dzukou & Sabine Duvaleix & Karine Latouche, 2024. "Product innovation and export strategy," Post-Print hal-04452985, HAL.
    3. Vona, Francesco, 2023. "Skills and human capital for the low-carbon transition in developing and emerging economies," FEEM Working Papers 338778, Fondazione Eni Enrico Mattei (FEEM).
    4. Francesco Vona, 2023. "Skills and human capital for the low-carbon transition in developing and emerging economies," Working Papers 2023.19, Fondazione Eni Enrico Mattei.
    5. Farrokhi, Farid & Lashkaripour, Ahmad & Pellegrina, Heitor S., 2024. "Trade and technology adoption in distorted economies," Journal of International Economics, Elsevier, vol. 150(C).
    6. Imani, Yusuke & Ohyama, Atsushi, 2022. "The Roles of Structured Management in the Formation of Transactional Relationships," TDB-CAREE Discussion Paper Series E-2021-07, Teikoku Databank Center for Advanced Empirical Research on Enterprise and Economy, Graduate School of Economics, Hitotsubashi University.
    7. Kox, Henk L.M., 2022. "A micro-macro model of foreign direct investment: knowledge-based gravity forces, self-selection and third-country effects," MPRA Paper 115542, University Library of Munich, Germany.
    8. Lu, Angdi & Zhang, Jiang & Li, Jie, 2023. "The impact of export VAT rebate reduction on firms' pollution emissions: Evidence from Chinese enterprises," Energy Economics, Elsevier, vol. 120(C).
    9. Kox, Henk L.M., 2022. "Explaining foreign direct investment patterns: a testable micro-macro gravity model for FDI," MPRA Paper 115273, University Library of Munich, Germany.
    10. Liu, Mengxiao & Wang, Luhang & Yi, Yimin, 2022. "Quality Innovation, Cost Innovation, Export, and Firm Productivity Evolution: Evidence from the Chinese Electronics Industry," MPRA Paper 113270, University Library of Munich, Germany.
    11. Piscitello, Lucia & Thakur-Wernz, Pooja, 2023. "Impact of domestic and foreign knowledge mechanisms on the innovation performance of Indian firms," International Business Review, Elsevier, vol. 32(4).

    More about this item

    Keywords

    developing countries; upgrading; firms;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • F1 - International Economics - - Trade

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