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Abstract

In development studies, the concept of a value chain is neatly connected with the process of upgrading i.e. firms are enabled to not only to act as bulk suppliers but instead to sell branded goods to (international) markets. However, the notion of upgrading has been challenged by several authors. For instance, with regard to the South African wine industry Ponte and Ewert (2009) show that a better outcome or ‘deal’ does not necessarily follow in the wake of higher value added. Drawing on a number of detailed case studies, in this paper we investigate this conclusion in more depth. By doing so, we try to explain which paths South African producer cellars have or have not chosen, and why. As global value chain theory posits that the governance structure of value chains are of crucial importance, we will pay particular interest to the design of the chains as a success factor.

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