Catching-up in the global factory: analysis and policy implications

Published on Feb 14, 2020
· DOI :10.1057/S42214-020-00047-9
Peter J. Buckley60
Estimated H-index: 60
(University of Leeds),
Roger Strange25
Estimated H-index: 25
(University of Sussex)
+ 1 AuthorsGaaitzen J. de Vries19
Estimated H-index: 19
(UG: University of Groningen)
MNEs shape the location of activities in the world economy, linking diverse regions in what has been called the global factory. This study portrays the evolution of incomes and employment in the global factory using a quantitative input-output approach. We find emerging economies forging ahead relative to advanced economies in income derived from fabrication activities, handling the physical transformation process of goods. In contrast, convergence in income derived from knowledge-intensive activities carried out in pre- and post-fabrication stages is much slower. We discuss possible barriers to catching-up and policy implications for emerging economies in developing innovation capabilities, stressing the pivotal role of MNEs.
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