The Globalization of Product Markets and Immiserizing Growth: Lessons From the South African Furniture Industry

Published Date
July 2002, Vol.30(7):1159–1177, doi:10.1016/S0305-750X(02)00029-3

Author 
Raphael Kaplinsky

Institute of Development Studies, University of Sussex, and Centre for Research in Innovation Management, University of Brighton, UK

Mike Morris
University of Natal, South Africa

Jeff Readman 
Centre for Research in Innovation Management, University of Brighton, UK
Accepted 6 February 2002. Available online 12 April 2002. 

Abstract

The central issue addressed in this paper is whether some developing countries will find it difficult to compete effectively in global product markets and will therefore be locked into processes of immiserizing growth. It focuses on the role of South African producers in the global furniture value chain, analyzing the factors affecting firm upgrading, particularly the role of global buyers. The paper observes a global industry characterized by increased competition and falling unit prices, with local firms dependent on a falling exchange rate. It concludes with implications for policy and future research, including generalizing the findings to other sectors and countries.

Keywords

South Africa

globalization

furniture

value chains

upgrading

currency depreciation

competitiveness

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 Table 3

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• ∗ 
  We are grateful to Sean Ellis for his assistance with the data, to the South African Industrial Development Corporation (IDC) for providing access to their database and to two anonymous reviewers for their comments.

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http://www.sciencedirect.com/science/article/pii/S0305750X02000293