Paper short abstract:

The paper explores upgrading dynamics among Kenyan handbag and footwear manufacturers operating within local and regional markets. It adopts a mixed-method approach that combines GVC literature and Resource Based View scholarship.

Paper long abstract:

This paper focuses on the Kenya handbag and footwear subsectors to shed light on their respective upgrading dynamics. Both subsectors are driven by local and regional markets with similar levels of governance, yet they display opposing upgrading outcomes with handbag manufacturers featuring higher levels of economic and social upgrading.

The comparison of footwear and handbag manufacturers sheds light on factors internal and external to the value chain that allow producers in local and regional markets to successfully upgrade. By addressing the question of what allowed some actors to quickly upgrade into high value products and new functional phases, this paper provides new evidence on the conditions under which local and regional markets are conductive to higher economic and social gains. This is achieved through a mixed-methods approach grounded on the GVC literature, the Resource Based View, and the scholarship on industrial policy and the developmental state. The main argument is that market trajectories and governance considerations are not enough to explain upgrading patterns of local suppliers. Conversely, upgrading in local and regional markets rests on actors' different capabilities and resources, which are in turn a consequence of their entrepreneurial model and the origins of the latter within different institutional setups.

The paper is part of a larger PhD research that examines the triggers of upgrading for local suppliers dealing with lead firms across Southern, Northern, and Regional markets. This is achieved through a combination of disaggregated gross export data and a set of qualitative interviews within the Kenyan and Ugandan leather VC.