Paper short abstract:

This study looks at a value chain that is experiencing a process of “globalisation” in multiple trajectories (north; south; region) to assess whether and how different end markets affect local suppliers’ capacity to upgrade both economically as well as in terms of functions, products and processes.

Paper long abstract:

Globalisation has been characterised by a phenomenon of integration through disintegration whereby increasing trade has been accompanied by a breaking-up of value chains across countries. Within a logic of export-oriented development, developing nations have seen participation into GVCs as a unique opportunity to relocate productive activities inside their borders, supporting not only economic growth but also better social standards. This notwithstanding, GVCs scholars have recently questioned the occurrence of this pattern, noticing how dependence on external buyers in developed countries locks developing countries' suppliers into low-skilled/labour intensive activities, preventing them from developing the institutions and know how required to move into higher stages of value creation. Whereas most of the literature has been concentrating on governance dynamics within South-North value chain, less attention has been paid to the recent surge in South-South trade that has accompanied the constitution of South-South and Regional value chains. Drawing on recent literature on trade and GVCs, this study proposes a mixed methodology combining qualitative and quantitative methods of data analysis to assess different level of governance and upgrading across three trade trajectories in the Kenyan agro-based leather industry - south-north; south-south; and regional. Provisional results show how regional markets have a different impact on local suppliers compared to other large scale Southern economies such as China and India, as well as traditional European end-markets. Moreover, a set of interviews among Kenyan tanners show how functional upgrading is a factor that depends more on upstream rather than downstream relations, and how considerations of learning myopia may explain upgrading trajectories better than a restricted governance-based approach