Global Value Chains and Local Inter-Industry Linkages: South Africa’s Participation in the Automotive GVC

Tobias Wuttke

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

International trade in the 21st century operates through global value chains (GVCs). There is a growing literature on how the emergence of GVCs has changed the playing field for catch-up industrialization of developing countries. Inter-industry linkages have historically been a central aspect of catch-up industrialization. How such linkages on the country level are affected by the reality that trade is conducted via GVCs is an important research question. This paper synthesizes the theoretical elaborations on inter-industry linkages from the classic development economics literature with secondary empirical data from the East Asian industrialization experience to illustrate the importance of inter-industry linkages for the industrialization process. Using primary data from the South African automotive industry, the paper shows how the dynamics of the automotive GVC have affected domestic inter-industry linkage building in the country. The backward linkages to the domestic component manufacturing industry and to the domestic materials industries from South Africa’s successful integration into the automotive GVC have been disappointing. Both local policy decisions as well as GVC-specific dynamics of follow sourcing and the proliferation of manufacturing technologies and material standards have undermined more substantial backward linkages from exports of automobiles.
Original languageEnglish
JournalJournal of Development Studies
Volume59
Issue number2
Pages (from-to)153-169
Number of pages17
ISSN0022-0388
DOIs
Publication statusPublished - 2023

Keywords

  • Global Value Chains
  • Industrial Policy
  • Automotive industry
  • Industrialisation
  • Linkages and local content

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