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Oxford Development Studies,
Vol. 36, No. 1, March 2008
Global Value Chains and Technological
Capabilities: A Framework to Study
Learning and Innovation in Developing
Countries
ANDREA MORRISON, CARLO PIETROBELLI ROBERTA RABELLOTTI
ABSTRACT This paper presents a critical review of the global value chain (GVC) literature in light
of the “technological capabilities” approach to innovation in less-developed countries (LDCs).
Participation in GVC is beneficial for firms in LDCs, which are bound to source technology
internationally. However, the issues of learning and technological efforts at the firm level remain
largely hidden in the GVC literature. We propose a shift in the empirical and theoretical agenda,
arguing that research should integrate the analysis of the endogenous process of technological
capability development, including specific firm-level efforts, and of the mechanisms allowing
knowledge to flow within and between different global value chains into the GVC literature.
1. Introduction
Nowadays, nobody would resist the contention that learning and innovation are key
determinants of competitiveness and growth for nations, regions, clusters and firms.
Sometimes, more sophisticated observers might stress that competitiveness is affected by
firm-specific attitudes and actions together with the meso and macroeconomic contexts in
which firms are located. Yet, these ideas need to be incorporated into analysis in a
consistent fashion, and this has been achieved only occasionally, and perhaps more
effectively by business scholars than by economists.
In developing countries (LDCs), following an established line of research exploring the
international sources of development—e.g. learning by exporting, foreign direct
investment (FDI) spillover (Barba Navaretti Venables, 2004)—the global value chain
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