Economic Upgrading Research Articles

Prospects of crude enzymes in replacing pure enzymes for dissolving pulp production.

High-purity cellulose from paper pulp can be obtained after appropriate treatments involving pure xylanases and cellulases/endoglucanases. This study investigated the efficacy of using crude xylanase and cellulase instead of commercial ones to improve process economics. Kraft paper grade pulp produced from veneer waste, hardwood, and non-wood sources was utilized as a more sustainable option. Crude xylanase and cellulase from isolated soil bacteria Bacillus pumilus 3GAH and Bacillus subtilis PJK6 were used for process optimization. The correlation between Fock reactivity, chain scission, and crystallinity after crude-cellulase treatment was established through chemical, FTIR, and XRD analyses. Pentosans in kraft pulp were reduced from an initial 18.7% to 4.9% through sequential treatments with crude xylanase and alkali. Subsequent crude-cellulase treatment, even at 8U/g o.d. pulp, improved Fock reactivity from 28.2% to 61.2%, fulfilling a major criterion for viscose. Thus, crude enzymes can be effectively used for the efficient and economical upgrading of paper pulp to dissolving pulp.

Exploration of the Construction of Economic Service Trade System under the Background of Hainan Free Trade Port

China has a large population, a large middle-income group, and a wide consumer market coverage. In the context of economic globalization, the connection between the Chinese economy and the world industrial chain has been further strengthened, contributing to the development of the global economy. Under the background of the Hainan Free Trade Port, building an economic service trade system will help to create a new highland for economic service trade, promote the development of China’s service trade, and facilitate the rational allocation of resources on a global scale. Because of this, the article will analyze the opportunities for building an economic service trade system and the challenges of building an economic service trade system under the background of Hainan Free Trade Port, and focus on analyzing the path strategies for building an economic service trade system to create a high-level new highland of service trade and actively face the challenges of era development and economic upgrading.

Smallholder Challenges of Social and Economic Upgrading in Agricultural Value Chains: A Cross-country, Cross-crop Comparison

This study is based on field research conducted by an international team of researchers investigating the opportunities for social upgrading of smallholder farm owners and tenants and their workers in the Global South. The main objective has been to assess the influence of crop characteristics, end markets, and value chain governance (including product and process standards), as well as national political, economic, and cultural contexts, on the conditions of farmers and farmworkers. Accordingly, the selected crops differ along the axes of domestic versus international end markets and short versus long shelf-life: coffee (cash crop), rice (staple crop), and mangoes (perishable crop). The selected countries are Bangladesh, Brazil, Colombia, Ghana, India, Pakistan, and Vietnam. Our main findings relate to the importance of collective action by key stakeholders, including smallholders and a supportive state, for economic and social upgrading.

EU Industrial Policy and Convergent Development in EU Peripheries: An Assessment of the ‘Important Project of Common European Interest’ (IPCEI) Template

AbstractIndustrial policy has been enjoying a significant comeback. In the European Union (EU), ‘important projects of common European interest’ (IPCEIs) have become a template for a new, value chain‐oriented EU industrial policy. But what does this mean for convergence between ‘peripheral’ and ‘core’ member states? Based on the understanding that convergent development requires opportunities for ‘learning in production’ to accumulate the technological capabilities that are necessary for economic upgrading within value chains, this article advances an in‐depth analysis of the implementation of this EU industrial policy template. It argues that IPCEIs have so far offered peripheral countries and their firms few opportunities for learning in production within value chains. In this light, there is a risk that IPCEIs might have limited or even detrimental effects on the prospects for convergence within the EU. The article concludes by considering how this template could be made more conducive to convergent development.

Economic upgrading of Central and Eastern European economies through global value chain participation and foreign direct investment

ABSTRACT This paper links global value chain (GVC) integration and operations of multinational enterprises (MNEs) in the context of host economies upgrading. Economic upgrading is referred to as higher exported value added that has been generated in the domestic economy as a result of foreign direct investment (FDI). Particular attention is paid to the impact of GVC on selected Central and Eastern European (CEE) economies. An econometric model is estimated using panel data of 44 sectors for four CEE economies over the period 1995–2018. A primary source of data is the latest edition of the TiVA (Trade in Value Added). The most important variable in explaining domestic contribution to GVC was the flow of foreign inputs. Backward linkages are crucial for building the GVC presence of the economies. The variables of interest – FDI stocks and flows – have in general a negative impact on the level of domestic content in analysed economies.

FDI and human capital development: a tale of two Southeast Asian economies

Middle-income economies must prioritise human capital development to ensure long-term sustainable growth and economic upgrading. While foreign direct investment (FDI) is believed to aid this endeavour, its impact on technical vocational education and training (TVET) remains understudied. This research explores the influence of FDI by multinational enterprises (MNEs) at various stages of global value chains (GVCs) on TVET graduate numbers in Vietnam and Indonesia from 2006 to 2016. Our findings reveal that greenfield FDI plays a role in shaping TVET supply, with heterogeneous effects across different GVC segments and subnational regions. Specifically, FDI in logistics, sales and marketing, and support and servicing are associated with an increase in the supply of TVET graduates in the region, whereas FDI in headquarters and production may lead to a decline in technical skills. To address these dynamics, public policies should prioritise flexible education systems capable of adapting to MNEs’ evolving skill demands. By doing so, these economies can elevate local human capital levels and avoid the stagnation often associated with middle-income traps. This research underscores the importance of aligning policy with the needs of a rapidly changing global economy to foster sustainable development.

The coupling coordination of social and economic upgrading in China: Evolution, regional disparities and influencing factors

The coupling coordination of social and economic upgrading in China: Evolution, regional disparities and influencing factors

The political economy of economic upgrading in Central Eastern Europe

ABSTRACT The paper explores the political conditions favourable to economic upgrading in democratic non-corporatist emerging economies with a focus on CEE countries as characteristic examples. While the existing literature has assumed this polity type to be the least favourable for designing and implementing effective industrial policies because of a lack of bureaucratic ‘embedded autonomy’, the paper argues that this is not to suggest that such industrial policies and economic upgrading are rare in these economies, but rather that they involve different mechanisms of political mobilisation and support. To identify these mechanisms, the paper adopts a social bloc-based framework and applies it to an in-depth study of Estonia, a strong upgrader in the region in terms of its increased economic specialisation in ICT-based services. The paper finds that a lack of ‘embedded autonomy’ can effectively be supplanted by the embeddedness of private actors in the state administration and political decision-making through a network-based configuration of the social bloc and a shared upgrading ideology leading to a conflation of private interests with national development goals.

Forecasting default risk of Chinese real estate credit bonds based on Bagging algorithm

In recent years, with Chinese rapid economic upgrading, it has also made the property industry more and more prosperous. However, due to the imbalance between supply and demand in China's real estate industry in recent years has led to an overly rapid rise in property prices, the risk of a real estate market bubble has increased, and many real estate companies have gradually defaulted on their bonds. Against this background, the aim of this paper is to construct a bond default prediction model using the Bagging algorithm in machine learning to predict the default risk of real estate bonds. And the results were also compared with Logistic model and SVM model, eventually it was found that Bagging algorithm can improve the prediction results more effectively. It is possible to identify real estate companies that may default on their bonds in advance, reducing investor losses, strengthening the risk prevention awareness of debt issuers, contributing to the healthy and stable development of real estate.

The implications of governance factors for economic and social upgrading in Ghana’s cocoa value chain

This paper identifies several governance factors that enable economic upgrading and the link between economic and social upgrading /downgrading of smallholders and Abusa sharecroppers in Ghana's cocoa value chain (GCVC). The findings are based on qualitative interviews and focus group discussions with various actors in GCVC. Our findings suggest two types of economic upgrading: process and product upgrading, achieved by smallholder producers and Abusa Sharecroppers in GCVC. While process upgrading is enabled by governance factors such as price stabilization and controlling opportunistic behavior, transparency in the sale of certified beans and premium management is key for product upgrading. Regarding the link between economic and social upgrading, we reveal that process upgrading leads to the same outcome of social upgrading and downgrading for smallholders and Abusa sharecroppers due to governance factors such as production and purchasing policies and lack of resources and capabilities. However, product upgrading links to social upgrading and downgrading for smallholders and Abusa sharecroppers respectively owing to governance factors such as controlling resources and bargaining power. We provide insights into key actors and their interests, drivers of change and effects of incentives that play crucial roles in shaping governance factors that influence economic and social upgrading of smallholders and Abusa sharecroppers in GCVC. In our conclusion, we identify how regulations, institutional support and conflicts of interest are key for enabling upgrading of developing countries’ agricultural value chains.

Spatiotemporal Dynamics in Economic, Social, and Environmental Upgrading in China: Coupling Coordination and Influencing Factors

The focus on the concept of upgrading in the study of global production networks has expanded from economic upgrading to encompass social and environmental upgrading. However, rare research pays attention to the complex interplay among these three aspects. This paper tries to integrate the economic, social, and environmental upgrading into an analytical framework through the lens of coupling coordination. Using the Granger causality test and panel regression model, it provides empirical evidence and an explanation of the triad’s interaction based on the Chinese case study. It is found that, over the past twenty-five years from 1996 to 2020, China has seen a significant improvement in the coupling coordination of economic, social, and environmental upgrading with the coordination degree rising from 0.35 to 0.51, though it remains at a low level of coordination. Regional disparities in economic upgrading are more pronounced than those in social and environmental upgrading, and the inter-group disparities between economic and environmental upgrading have widened following the economic crisis. Panel regression analysis shows that economic globalization, public governance, legal environment, and environmental regulation positively influence the coupling coordination of the three types of upgrading, while economic privatization and corporate violations of law tend to have a negative impact.

Analysis of new urbanization level measurement in Heilongjiang Province

In recent years, Heilongjiang Province has made significant contributions to the country based on its resource advantages, but the contradictions and problems in sustainable development have become increasingly prominent. In order to better study the economic upgrading and transformation of resource-based cities in Heilongjiang Province, this article focuses on the new urbanization and industrial structure optimization level of resource-based cities in Heilongjiang Province, Construct and analyze the measurement index system for the level of new urbanization and industrial structure optimization, respectively. Under the concept of regional coordinated development, an evaluation index system for new urbanization and industrial structure was constructed. The coefficient of variation method was used to calculate the weights of various indicators for the new urbanization system and industrial structure optimization system. The grey correlation theory was used to analyze the correlation between the selected indicators for characterizing the level of new urbanization and industrial structure optimization, aiming to make the correlation between the internal indicators of the system more reasonable, By promoting the coordinated development of new urbanization and industrial structure optimization, resource-based cities can achieve economic upgrading and transformation, thereby achieving sustainable economic development. The research results indicate that policy recommendations for coordinated development between the two are proposed.

A battery bonanza for the global South? Prospects for economic upgrading in lithium-ion battery value chains in the context of strategic capitalism

This paper assesses global battery value chains and efforts to achieve economic upgrading in these. It provides an outline of the ways in which the global economic order is changing and discusses key concepts which account for that, including strategic capitalism and geoeconomics. The paper suggest that a changed global economic order likely impacts economic upgrading efforts by countries in the global south but precisely how is uncertain. The type of impact might be multifaceted and it may constitute impact of an either positive or negative kind. The paper identifies relevant research questions and explores four different ways that a changing global order may alter conditions for economic upgrading in the battery sector: Ideological shifts, systemic measures to safeguard competitiveness, long term thinking and stewardship of access to major markets.

A journey toward global value chain upgrading: Exploring the transition from backward to forward integration

Global value chains (GVCs) are embraced worldwide as a gateway to technological and economic upgrading. Countries integrate into backward, value-importing linkages with the aim of accumulating technological capabilities and transitioning towards creating their own forward, value-exporting chains and capturing a greater share of the value generated within GVCs. Existing knowledge, which is largely fragmented and descriptive, points to a number of uncertainties and complexities that make this process anything but linear. It is open question whether the deepening backward linkages facilitates forward integration in GVCs. Using data from 65 countries over two decades, we show that the impact of backward integration on forward integration in GVCs varies over time and that it is moderated by the level of development of the country, the diversity of the GVC partner network and the innovation conditions in the home market. The research adds a new perspective to the literature on GVC-driven upgrading.

Changes in the socio-economic characteristics of households can decouple carbon emissions and consumption growth in China

The increasing consumption in developing countries poses a significant challenge to global climate change mitigation efforts. Understanding household characteristics is essential in exploring potential strategies to decouple carbon emissions from the increasing consumption. In this study, we utilized the multi-region input-output (MRIO) method to calculate household carbon emissions in China for the years 2012, 2016, and 2018. Using micro-level household survey data, we identified variations in carbon emissions among households with different economic levels and socioeconomic characteristics. Our analysis revealed that changes in household consumption structure and carbon intensity among households with improved economic levels, could result in a reduction of carbon emissions by 14 % to 19 %. Furthermore, households characterized by higher education levels, larger family sizes, and smaller housing units were found to generate lower carbon emissions per capita and per unit of consumption spending. By simulating household carbon emissions up to 2030, we identified three potential pathways to achieve decoupling: household economic upgrading, transitioning to low-carbon household characteristics, and reducing material consumption. Our findings indicate that even with a projected 75 % increase in per capita consumption volume by 2030, per capita household carbon emissions could still be lower than the levels observed in 2016. These results underscore the potential of consumption-focused policy measures in facilitating the decoupling of household consumption from carbon emissions.

Hierarchical joint optimization of modular product family and supply chain architectures considering sustainability

Since sustainability is a growing concern, businesses aim to integrate sustainability principles and practices into product and supply chain architecture (SCA) design. Modular product architecture (MPA) is essential for meeting sustainability demands, as it defines shareable and detachable modules to facilitate assembly/disassembly and recovery. However, Traditional architectural modularity overlooks interface complexity and fails to balance commonality, complexity, and cost for effective facility sharing and ensuring ease of disassembly and upgradeability. Therefore, it is inefficient for economic design, modular recycling, and assembly/disassembly operations. Furthermore, the existing modular clustering methods cannot characterize components that may generate complex modular structures and decrease compatibility for remanufacturing and upgrading. Therefore, such methods cannot offer guidance on modular granularity to reduce premature product discarding through economic upgrading. This paper outlines a modular PFA and SCA by bi-level programming prioritizing sustainability. It emphasizes reducing product discarding and waste generation by focusing on lower remanufacturing costs and higher upgradeability in modular products and SCA. Here, the similarity of operation, ease of disassembly, and upgradability have been used for SCA with architectural and interface modularity. A fuzzy inference system (FIS) differentiates each product component and provides a basis for remanufacturing and upgrading compatibility. The developed leader-follower decision structure allows the selection of suitable and sustainable module candidates to share among product families, considering product architecture, processing activities, and upgrading opportunities. The designed case study on refrigerator PFA shows that the proposed approach saves 23.93 %, 7.21 %, and 17.2 % of SCA costs compared to non-modular, random clustering, and sequential approaches. Further numerical analysis evaluates the proposed model's economic, social, and environmental implications. Accordingly, the model is suitable for guiding modularization for financial gains while promoting environmental and social sustainability.

Intra-country inequality and involvement in GVCs: the case of EU-28

Nowadays, production is configured around Global Value Chains, and countries’ involvement in those has become important objectives for achieving economic upgrading. However, social outcomes are neither equally distributed between countries, nor among social classes within countries. Indeed, GVCs and the potential gains of countries' involvement in them, yield uncertain implications of the effects of globalization on inequality within countries. In this context, the aim of this work is to analyze the link between the performance of countries in GVCs (measured trough participation and position) and the levels of intra-country inequality. In more depth, we focus on Europe (specifically, EU28 countries), as it offers a wide and cohesive scenario of developed countries in which to test the effects of linking into GVCs on internal inequalities. We get a positive effect of participation in GVCs on increasing intra-country inequality, while more upstream positions are linked to decreases in income inequality. Besides, if we differentiate by geographical area, Western and Southern European countries would achieve higher reductions in inequality than Northern countries by moving towards more upstream positions.

Transnational governance of digital transformation: financing innovation in Europe’s periphery

ABSTRACT Policymakers in Europe have embraced the notion that they can and should drive economic growth by promoting digital technology. Efforts to do so, known as ‘digital transformation’, involve reallocating labour and capital to more efficient uses, especially those that produce technological innovation. Recent research has shed light on the politics of updating institutions for education and skills training, but we know little about the politics of reallocating capital in the current episode of economic upgrading, despite the specific and sizable costs of producing technological innovation. What strategies are policymakers implementing to finance technological innovation, especially in Europe’s periphery, where states lack fiscal resources? Focusing on the case of Portugal, this article illustrates the centrality of development financial institutions to financing technological innovation, identifying a distinct type of digital transformation in Europe’s periphery, where the state plays a marginal role in governing key aspects of economic upgrading. Instead, private finance allocates capital, and international organisations like the European Commission design policies to govern capital allocation. This article develops a framework for analysing the politics of digital transformation in Europe’s periphery that centres transnational actors and institutions, rather than the state, in directing the path of technological and structural change.

Governance, innovation networks, and climbing the upgrading ladder: The case of Philippine and Thai manufacturers in global value chains

This paper argues that the economic upgrading of suppliers in global value chains (GVCs) is influenced by the prevailing governance structures in supplier-lead firm relationships. Using a novel governance index for Philippine and Thai manufacturers, this paper tests if tight effective control received by suppliers can be detrimental to higher-order GVC upgrading. The unique 2012 Survey on Adjustments of Establishments to Globalization was used to calculate the index for Philippine manufacturers, while the World Bank’s Productivity and Investment Climate Study 2006–2007 was used for Thailand. The econometric results confirm that tight governance negatively affects upgrading in both countries. Specifically, the Philippine estimates show that tight governance has no impact on process upgrading given that: (1) all GVCs benefit from efficient suppliers, regardless of governance structures; and (2) process upgrading has relatively simpler technological requirements than higher-order upgrading. Tight governance significantly reduces the probability of achieving more sophisticated product, functional, and intersectoral upgrading, especially when this encroaches on the lead firm’s core functions. But since governance and control are necessary for efficient GVC operations, suppliers must conscientiously build capabilities and networks to move up the upgrading ladder. For weak-capability suppliers, innovation networks are important external sources of technology and knowledge spillovers.

The role of collective action in the cacao sector in enhancing sustainability, market upgrading and agro-biodiversity conservation

Many farmers around the world are confronted with the decision of adopting high-yielding varieties or maintaining the diverse portfolio of ancient varieties and cultivars that constitute the basis of local and global agrobiodiversity. This dilemma often resolves towards ensuring short-term individual profits at the expense of long-term biodiversity conservation. In this paper we argue that specialty markets can act as a driving force to resolve this balance towards the conservation of agrobiodiversity, supported by collective action. We use the case of the Ecuadorian cacao producers to illustrate this possibility. The upper Amazon is the center of origin of cacao, one of the top traded global commodities. Since the 1990s Ecuadorian farmers have been substituting regional varieties with a clone developed in the country, the CCN-51 that has shown to be a high-yielding variety that is also resistant to monilia, a common cacao disease. In some areas of the country, however, farmers belonging to cooperatives have been able to keep local varieties, obtain ecological certifications for adhering to the recommended practices, and reach specialty markets that pay higher prices for their cacao. We call this set of benefits upgrading. We conducted a study of 205 household surveys and several interviews in four provinces along the West coast of Ecuador. We assessed the role of collective action (in the form of cooperative participation) in enhancing farmers’ access to high-value chains. Our results show that collective action enables economic upgrading by providing participants with higher incomes and more formal contracts. As farmers join direct trade and certification, other benefits are accrued, such as cacao and non-cacao tree biodiversity conservation. This analysis shows that, once niche markets are open for farmers, collective action boosts the benefits of such opportunities.