Working Paper: NBER ID: w29461
Authors: Eric Verhoogen
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.
Keywords: industrial upgrading; developing countries; firm-level research; technology adoption; product innovation
JEL Codes: F12; O14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| consumer demand (D12) | firm performance (L25) |
| high-quality inputs (L15) | upgrading (O39) |
| lack of knowhow (D83) | upgrading (O39) |
| market conditions (P42) | upgrading (O39) |