The Co-Evolution of Concentration in Mobile Phone Global Value Chains and Its Impact on Social Upgrading in Developing Countries

Capturing the Gains Working Paper 25

27 Pages Posted: 24 Mar 2013

See all articles by Joonkoo Lee

Joonkoo Lee

Hanyang University

G. Gereffi

Duke University - Department of Sociology - Director, Center on Globalization, Governance & Competitiveness

Date Written: March 21, 2013

Abstract

This paper examines the relationship of economic and social upgrading in the global value chain (GVC) of mobile phone manufacturing. It specifically questions (1) how the GVCs of mobile phone manufacturing have changed the dynamics of trade, production and value creation and capturing in developing countries; and (2) how those dynamics have affected the social upgrading of workers in GVCs in terms of employment and wages. The paper identifies several key features of the mobile phone GVC. First, although mobile phone manufacturing was fragmented significantly over the past decade as a result of the relocation of production to developing economies, by the end of the decade it was characterized by the mutually reinforcing co-evolution of geographic and organizational concentration within the mobile phone GVC. Second, global mobile phone production is driven by a handful of lead firms. The consolidation of lead firms helps drive the consolidation of their suppliers, while lead firms capture much more value than their contract manufacturers do. Finally, GVC participation has a significant impact in terms of generating employment where manufacturing is concentrated, but it has a limited impact on wage increase.

Keywords: mobile phone manufacturing, global value chains, concentration, economic upgrading, social upgrading

Suggested Citation

Lee, Joonkoo and Gereffi, Gary, The Co-Evolution of Concentration in Mobile Phone Global Value Chains and Its Impact on Social Upgrading in Developing Countries (March 21, 2013). Capturing the Gains Working Paper 25, Available at SSRN: https://ssrn.com/abstract=2237510 or http://dx.doi.org/10.2139/ssrn.2237510

Joonkoo Lee

Hanyang University ( email )

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Gary Gereffi (Contact Author)

Duke University - Department of Sociology - Director, Center on Globalization, Governance & Competitiveness ( email )

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Durham, NC 27708-0204
United States
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