Firm-Level Upgrading in Developing Countries

56 Pages Posted: 8 Nov 2021 Last revised: 1 Jan 2022

See all articles by Eric A. Verhoogen

Eric A. Verhoogen

Columbia University - School of International & Public Affairs (SIPA); IZA Institute of Labor Economics; Centre for Economic Policy Research (CEPR)

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Date Written: November 2021

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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Suggested Citation

Verhoogen, Eric A., Firm-Level Upgrading in Developing Countries (November 2021). NBER Working Paper No. w29461, Available at SSRN: https://ssrn.com/abstract=3958648

Eric A. Verhoogen (Contact Author)

Columbia University - School of International & Public Affairs (SIPA) ( email )

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IZA Institute of Labor Economics

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Centre for Economic Policy Research (CEPR) ( email )

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